Greetings, and welcome to the Tecogen Second Quarter 2017 Results Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to Bonnie Brown, Chief Accounting Officer. Thank you, please go ahead.

Thank you, Brenda. Good afternoon, and thank you all for joining our second 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. Various remarks that we may make about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. We may have forward-looking statements about our future financial performance that involve risks and uncertainties. These risks and uncertainties could cause our results to differ materially from our current expectations. We encourage you to look at the company's filings with the SEC to get a more complete picture of our business, including risks and uncertainties just mentioned. Also during the call, we will be referring to certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of the non-GAAP financial measures used on this call to the most directly comparable GAAP measures is available in our press release and in the table the company has released. We may elect to update forward-looking statements at some point in the future. We specifically disclaim any obligation to do so if our estimates change and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. I'll now turn the call over to John Hatsopoulos for some opening remarks.

Ladies and gentlemen, thank you very much for participating in our conference call. I wanted to thank you all for your patience after well over a year of trying to merge with ADG, we finally have been able to achieve it, and I think that this is going to be very helpful in the years to come. Before I pass it onto my partner and co-President of the company, Ben Locke, I wanted to introduce Jeb Armstrong, who is new Director of Capital Markets. And it's something that we needed badly. And now, we can finally, when we're profitable, we can afford to hire. Jeb?

Thank you, John. It's wonderful to be here, thank you so much. It's a pleasure to join the team, and I look forward to speaking with many of you over the next coming days and weeks.

With that, I'd like Ben to take over. Ben?

Thanks, John. First and foremost, I'd like to welcome our new investors in Tecogen as a result of the ADG merger. We believe the acquisition of ADG will contribute meaningful value to Tecogen as we continue to grow the business. We hope the new investments that are now part of the Tecogen shareholder base realize the tremendous success Tecogen is achieving and the promise of future accomplishments going forward. It's been a very busy quarter for the company, so to make sure we'd cover everything, Slide 4 outlines the topics we'll cover. I'll start by reviewing the company's performance for the quarter, key financial results, impact of the ADG acquisition and key drivers to the business going forward. Bob and Ahmed will then give an overview of our emissions technology. Bonnie will provide more detail on the financials then I will have some final remarks before we take questions. But first, I'd like to start off by -- 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's Cheaper, Cleaner and More Reliable. Our proprietary technology for improving efficiency, emissions and grid resiliency is truly disruptive to these traditional methods of heating, cooling and powering buildings and infrastructure. And now, with the acquisition of American DG, we have added the on-site utility business to Tecogen, making this a completely vertically integrated clean technology company, able to offer equipment design, manufacturing, installation, financing and long-term maintenance service. The ADGE fleet will contribute steady, annuity-type revenue to supplement Tecogen's revenues. We'll talk more about the impacts of the ADG acquisition throughout the call. So turning to Slide 6, we are immediately seeing the financial benefits of the mid-quarter ADG acquisition supplementing the strong performance of Tecogen…

Good morning, and thank you, Ben. I was unable to participate in the first quarter earnings call in March due to a travel conflict. As such, my discussion today will cover the company's emissions technology progress since the March call. There are 3 specific programs of interest I will be reviewing today. First, I will discuss the research grant in order 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 each units without annual, hourly limitation. Lastly, I will discuss progress made by our subsidiary, Ultratek, in the automotive application of Ultera. Because of some interesting and favorable regulatory developments in Europe that have received considerable press coverage, we have asked Professor Ahmed Ghoniem to provide his perspective as to their likely impact to our Ultratek initiative. Professor Ghoniem is uniquely qualified to do so as he is Ultratek's Technical Director and has many years of professional experience in the area of vehicle emissions and the associated regulations. Let's begin. As announced last October, 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. I want to point out that the technology rights for the fork truck application reside with Tecogen and we're specifically excluded from our agreement with our automotive-focused subsidiary, Ultratek. The project has significant potential for the 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. The market losses occurred…

Thank you, Bob. I will make my remarks brief and focused. As Bob mentioned, we have heard the announcements recently from several countries in Europe and from India, as well, about plans to ban gasoline and diesel fuel cars starting as early as 2025, 2030 as -- or late as 2040, replacing them with electric or electrified cars. These are aggressive plans and time will tell how realistic they are. This is important because of the need to expand the charging infrastructure and to make charging fast and available everywhere. We should also qualify the statement, electrified vehicle include hybrid vehicles that use an internal combustion engine as an important part of its drive chain. A more likely scenario is that by 2040, a significant fraction of new vehicles will be hybrid or electrified but not pure electric. By looking at the background and motivation behind these announcements, it's clear that clean air is the target. These countries suffer from poor air quality in some of their major cities and vehicle emissions are being blamed for part of it. These omissions include all criteria pollutants, that is NOx, hydrocarbon, CO and particulates. The second motivation is meeting the goals of the Paris Agreement on CO2 reduction. But this depends on how their electricity will be generated and the well to wheel accounting for CO2 emissions. First and foremost, these countries are looking for the euro or near euro emission vehicles to replace the diesel and gasoline fee. They know that diesel vehicles have been a major source of pollution in cities, also gasoline vehicles. Regulators are looking for ways to combat this and are sending strong signals that they are willing to act in order to clean up their air. A more realistic approach to achieve the clean-air goal, at…

Thank you, Professor. And I'll now turn the conversation over to Bonnie Brown, our Chief Accounting Officer.

Thanks, Bob. I'd like to start with a discussion regarding the merger with ADG and how it's been presented in the financial statements of Tecogen. Since ADG became a wholly-owned subsidiary 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 6 weeks and not its full quarter. In addition, the purchase accounting has not been finalized and balance sheet values are presented as provisional, pending completion of the necessary valuations and analyses. Moving onto the quarter, Slide 13 contains some of the highlights of the year-on-year financial results for the second quarter. First, total revenues increased by 33.5% compared to the same period last year. Product revenues alone grew 29% compared to the same period last year, with a 45% increase in the sales of cogeneration modules and 12% increase in chosen heat pumps. Total service revenue grew 13% compared to the same period last year and continued its steady growth, delivering well over half of our product and service revenue for the quarter. The company posted a 7% increase in service contract and parts revenue on a year-over-year basis. This increase was the 18th consecutive quarter of year-over-year quarterly contract service revenue growth. For year-over-year comparisons adjusted to the seasonality of Tecogen service revenue, these long-term contracted maintenance and service agreements account for a substantial piece of the company's total revenue providing an annuity-like revenue stream. We also have our energy production revenue stream from our merger with ADG, which added $774,000 to our total revenues. Again, this only represents the portion of ADG's revenues that were earned over the 6-week period after the merger date.…

Bonnie, you want to mention something about the cash available in the company?

Yes, it's in the press release.

Yes, but I think maybe you should.

Sure. Sure. Our cash grew -- as Ben mentioned, I believe our cash grew by $42,000, so we had positive increase from March -- the number in March of, I think, it was 3-point -- it was $42,000 less $3.2 million to the $3.3 million that it is on June 30.

The first time it's gone up and not down.

Yes.

Good.

Good, good thing.

Thanks very much, Bonnie. So as I mentioned earlier in the call, this second quarter was really a transformational quarter for Tecogen in many ways. First and foremost, obviously, we're completing the American DG acquisition, took many months of effort, but now that it's completed, we're immediately starting to see the benefits of the transaction. The ADG fleet is producing steady annuity-type revenues for the company and due to the efforts of Bob and his engineering team over the past year, the fleet has demonstrated better margins and profitability. We expect additional efforts by Bob's team to illicit even more revenues and profits from the fleet with minimal capital outlay. We are looking forward to seeing a complete quarter of revenue contribution from ADG in the coming months so that the full impact of the margin contributions and expense controls can be more fully seen. Next, we'll continue to grow our revenues and margins through our core business of product sales and service. Our CHP systems are becoming increasingly knowledged and specified as the best technical choice for CHP in our size range. Our chillers are becoming the standard of design for indoor growing facilities. Our relationships with key partners continue to grow and expand, and environmental pressures and grid resiliency concerns still continue to support the trend towards Tecogen products. We have demonstrated tremendous financial growth over the past few quarters. After 3 straight quarters of profitability, the second quarter of 2017 was also a financial success, when taking into account the onetime merger-related expenses, the ADG fleet depreciation and other noncash expenses. As a result, our cash balance is beginning to grow and we expect further success in the rest of the year. 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.

[Operator Instructions] Our first question comes from the line of Amit Dayal with Rodman & Renshaw.

[indiscernible] ADG, first of all. I have a few questions on that, maybe I can start with those. What is the plan to integrate ADGE and Tecogen's offerings from a marketing and sales perspective?

So we have been implementing that. Speaking of marketing and sales, obviously, American DG has a brand, that the American DG brand is out there, so we're continuing in that. That's why we're maintaining American DG as a wholly-owned subsidiary so we can maintain continuity with the marketing of it, with the website, for example, with our existing customers, et cetera. From the sales standpoint, they had a CRM sales tool, that we took over and are integrating that into Tecogen's sales -- Tecogen's own CRM. ADG did not have any sales folks at the time of the merger, so there was no integration on that side of thing. But I think we've gone pretty far in getting all the sales and marketing of American DG integrated to Tecogen.

Do you see any upselling opportunities in the near term? Or is this something that might happen longer term?

What type of opportunities, Amit?

Cross-selling opportunities between your Tecogen's portfolio and ADG's offerings.

Oh sure, sure. So American DG has its fleet, of course, we're maintaining, and various -- parts of that fleet are in various stages of the OSU, of the long-term agreement. Some of those agreements are coming up to expiration, or in some cases, they might have already expired. And the work that Bob and his team has put and they're really rejuvenating these assets and making them run well puts us in a great position to get them to re-up the OSU for another term, so that extends the backlog of ADG, number one. Number two, just kind of getting much more familiar with the fleet owners, the owners of the buildings, et cetera, is starting to reveal that they have other buildings that could possibly be prospects for systems, whether it be another OSU or perhaps it could be just a direct install. And having the ability to give the customer both options now is tremendously beneficial. So yes, there's a lot of opportunity that we're starting to open up just interacting more with the existing fleet and the project owners.

Understood. You mentioned you have 400-kilowatt systems in backlog for ADG. Could you clarify how much that translates into dollar terms?

I don't think we have at our fingertips what the estimated full 15-year OSU contract value is.

Right we -- it's -- I don't have at my fingertips, but obviously, those units will run many hours in the year and every hour they run, they'll generate revenues for the company, but I would think it would be -- I don't want to put a guess in there, I'm sorry, but they'll be significant.

Okay, just maybe another way to ask it is, does the backlog number include any from ADGE or not?

Yes, that backlog -- no, it is not. It is not.

Okay, okay. Understood. In regards to the California environment testing that's coming up, what happens once this is approved, et cetera, from a marketing and sales perspective what are you planning to kind of -- how you're planning to leverage these going forward.

Right. We have -- once we've got that under our belt, we can show it to other ESCOs, other owners of equipment and begin to market it as a tool. We can also go to the manufacturer of the generators and speak to them about these real results that could transform their products into a different role, not just an emergency generator, but a generator that can save by running a few hours a month as the demand tool. But it's -- that's a whole initiative that I think we'll have to get started.

Just maybe one last one for me. Sales margins are down mainly due to some onetime expenses you guys talked about. Do you expect those margins to bounce back going forward?

Yes, sure, yes. I can take that on, Amit. Yes, so the -- those margins are our service, our maintenance as well as our installations. We -- I think, as you know, we sell our units and sometime we sell our units and do the full turnkey installation and obviously, a much higher revenue number by doing a full turnkey installation than if we sold the unit alone. But that -- it's an installation, which requires mechanical, electrical, plumbing. It's construction, it's construction. And margins in construction are -- can be up and down, depending on the job. And in this past quarter, we had a few jobs that the margins just weren't as healthy as we would like them to be. That could be a number of factors, they can be just -- again, the construction came in a little more expensive. It could be, I know in the case of a few projects here, as being competitive in the marketplace, if there's other proposals and it comes down to a cost competition, sometimes, we have to take a little bit of a haircut, and we do solo with full knowledge of the consequences. So we had a few projects that we made a little bit of a concession on price on, but much longer long-term gain from that because I think as you notice, when they do a construction project, even the construction margins aren't that great, we get our full margin of the unit that we sold with that, but more importantly, we're lining up 5, 10 years of good, solid margin service revenues going forward. So I think that's the reason you saw that drop a little bit is we decided we'll shoot a few projects that weren't -- margins on the installations weren't as strong as others.

Our next question comes from the line of James Jang with Maxim Group.

So I know Bob mentioned this -- for the Ultera technology. So proof of concept should be at the end of '17. Have you guys had any more increase from other fork truck manufacturers? Or are you still just working with the one?

We contacted 2 at the outset of the program when we initially fund it and we've got interest from both. And we have given budget to work with for the program, so we selected the one that we thought would have the most interest and to deliver trucks fast, and so forth, but we -- I believe we could have gotten either one fleet, if we wanted to.

Okay, and with your conversation with them, are they looking for something exclusive? Or are they just happy with getting the technology retrofitted on their trucks?

I'm -- we have not -- I have not had that discussion with them directly, I would suspect they would want sort of advantage in the marketplace, but we have not made any agreement one way or the other.

Okay. The last question about that is, what about, I guess, bringing that in-house? I guess if you guys are able to -- I don't know if it's feasible, but if you're able to create fork truck engines so that in the market, is that something -- is that an option on the table? Or are you kind of just looking to license the tech out?

We haven't decided one way or another, but I'll tell you this, the fork truck manufacturers, they buy their engines from a few suppliers, okay? So these third-party companies supply the engines. And one likely scenario I would think would be once the manufacturer of the fork trucks says, I want this engine as a -- in my vehicle, then we would work with the engine manufacturer to get the engine certified with those -- with that device added to it. That's a likely scenario.

Okay. And one last one. So Bob, I know you have done this for a long time so maybe you can answer this. Can you scale this up to larger engines? I know fork trucks are a little smaller, but, let's say, ship engines that run on LNG with this...

Yes, yes. Of course, the engine size we can scale it up. But the real issue with the larger engines when they get very, very large, I'm not sure about ships, to be honest with you. But...

I just took one to -- I just wanted to think of.

Yes, that's the -- no, the engines that are -- that we run into that are large of that technology uses a lean burn technology where they add a lot of extra air into combustion process to keep the NOx down. It doesn't do as well as we do, but it does well enough with some ammonia injection and exhaust to meet the emissions. That's not practical under a megawatt really, but so we can go up easily to the megawatt size and stationaries, but with really, really large engines, I don't think we're a good fit because of that, but I don't know about ship engines, to be honest with you.

[indiscernible] Bob, I can say a couple of words about that, the regulations, the maritime regulations are getting tighter and tighter, and it's not unlikely that there will be a move towards spark ignition, so kinetic engine for some of these applications. And so if that does happen, then the technology will be compatible with making generation ship engines as well.

Okay, great. Yes, because I know the IMO they had a regulation in 2020 and there's a lot of options on the table, nobody's actually, I guess, nailed down the tech they're going to use. So...

And they are getting different, different like it's -- it's likely that they will get even more so and it's sort of the historical precedent for diesel engine or for compression ignition engine to be implemented in them may not survive. And with sort of the switch towards gasoline [ spark-less ] engine, it's not unlikely that, that could present itself as an opportunity for these manufacturers as well.

Okay. Good. And I just have one thing. I don't know if you guys had any discussions with I guess the European environmental agency, but I know they're trying to do away -- I know France is trying to do away with diesel engines. Have you heard anything in regards to that?

That's what Ahmed was speaking about, I think about all engines now being under consideration. Ahmed, you want to add something to that?

Yes, yes, sure. So actually, the direct answer to you is we have had discussions with a major auto manufacturer in Europe. We haven't yet had discussions with the regulators, but we've had discussions with an auto manufacturer, and there was obviously interest although again, the auto industry is conservative and tends to take careful steps before adopting any new technology. So with regard to the diesel, I'm sure you heard about announcements near-term than on vehicle cars getting into downtown tariffs and one of them among a few other cities. So in the near term, seems like the big cities are going to take up kind of local initiatives to ban -- either ban or completely or impose very strong levies on diesel cars being driven. In fact, we had a discussion with a senior executive in one of those companies who said that he cannot drive his car downtown that is because he has brand new diesel, while his wise-old gasoline can be driven anywhere, and he wasn't too happy about that. But the upshot of it is diesel is clearly facing a huge uphill battle in Europe and that will continue in the near term. In the longer term, the announcement that came out from Europe, in particular France and the U.K, about banning both gasoline and diesel cars by 2040 was clearly motivated by concerns of air quality. You just have to be in one of those cities in the summer to know what people breathe. So they are concerned, first and foremost, about air quality, about emissions coming from the vehicles and we think that this produces an incredible opportunity for a technology that can reduce the emissions by a significant amounts similar to technology or development because that will meet existing vehicle technology internal combustion engines last a lot longer than people have anticipated so long.

Yes, it's -- so, let's say -- I know 2040 is probably not going to be the heart date, but let's say 2040 is the date. If that's the case, how long do you think it'll take before automobile manufacturers will start to look at the Ultratek technology in earnest?

I'm sorry, can you repeat that?

I'm sorry to happen, sorry. No, so I think I got the question, although maybe in our bucket [indiscernible] I mean, typically, auto manufacturers look at next generation 3 to 5 years from now, so implementation of new technology doesn't happen in next year's model, it happens on models that are being planned for somewhere between 3 to 5 years because they need to design the systems and implement them and get the assembly lines ready, and so on before they can produce new technologies. So if they are now under the balance so to speak, to look at extremely low emissions technology by 2040, I can see them getting very anxious and getting ready to start scouring the landscape for technologies that will allow them to do that.

I just want to take this. James, I would like to answer you more, but I know that there's a queue of callers that I think that out of respect we should get to. We are going to take your questions off-line.

Ben, excuse me, I have a flight to catch. This is John Hatsopoulos. Thank you, everybody. Everybody else is going to stay here for a few more minutes, but I apologize that I have to leave. Thank you.

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

Ben and Bob, congratulations on a real turnaround quarter going forward. A couple of questions. Are we considering a dedicated sales force for the indoor farming, vertical farming marketplace? And then a follow-up, what's going on with Ilios?

Sure. I'll take the first question. We kind of have -- we have a -- and just so you know, the sales to these indoor grow facilities are very technical engineering sales, which I like, because you're dealing with professionals that understand the equipment, understand HVAC systems, refrigerants, economics and all that kind of thing. So we have, in fact, an engineering team that we've kind of focused, not all the time, but with a lion's share of their time working with these engineering companies that design the grow facilities. And indeed, as I mentioned before, it's getting their mindset off of CHP -- CHP makes sense in some cases, but the chillers require a little bit more thought on these individuals' part but I think they're understanding it and once they start to specify it, once you become the basis of specification, then it just carries you through. It's not really selling anymore because you've become the basis of specification. So we are indeed focusing people on that, but it's not so much that the traditional salespeople as it is, our engineers working with the engineering companies that do the specifications. With regards to Ilios, we're still, of course, moving on in earnest with that. There are geographies that make more sense than others. Finding the right sales approach for that is a little tricky. Hiring a direct salesperson in some remote geography has a risk/reward to it, whereas hiring sales agents -- I've talked about sales agents before and reps for that matter make a little more sense. So we are continuing to grow our network of agents and reps that carry the Ilios line. You just can't beat up on these guys as much as you can if they were a direct hire. But that's kind of the trade off, so Ilios is still spinning a lot of attention to it.

And then one follow-up question. We have a line entry called unfavorable contract liability. Is that a liability that will be amortized over a period of years? Or is it a stable amount?

It will be amortized over period of years. It represents...

So eventually then, it will fall to 0, and that'll be a positive impact on the balance sheet?

That's right.

Well, that's good to know. Any estimate? Is that like a 5-year, 10-year? Or is it tied to contract life with ADGE?

It's tied to contract of ADGE. So we'll be tied to the life of each contract.

But nevertheless, a positive development going forward?

Yes, definitely.

Our next question comes from the line of Alex Balanton (sic) [Alex Blanton] with Clear Harbor.

It's Alex Blanton. All right. The cover of your slide presentation for several quarters, including this quarter, is I believe the Westin Hotel in New Jersey, looking toward Manhattan and shows the roof of the hotel with 3 InVerde installations, correct?

Yes, that's right. It's a lovely view up there. I've been up there myself. You got a nice view over the Manhattan skyline.

So that brings up the question of what the market is for these large hotel chains. If the Western hotel in New Jersey can justify this installation and get a payback on it, why not all the other Westin hotels? And what is being done about pursuing the hotel chain market in general?

Sure, yes. You're exactly right, Alex. I mean that -- I spent all my days thinking about these things and hotel ownership groups instead of just doing the one, of course you want to do a fleet. Now that particular hotel is owned by a hotel ownership group, I'm not going to mention its name, but we are indeed talking with them about multiple other facilities, and this ownership group doesn't just have hotels, they have residential buildings. So that's exactly what I'm doing here, is not just focusing on the onesies, twosies, but getting behind the actual ownership and going through their portfolio. So we've got several groups, hotel groups, property management companies, et cetera, that we go systematically through a -- of course, you show success with the first couple, but then you systematically go through their profile and find the buildings that make more sense. Now not everyone makes sense. There could be installation. You might have to cord you up 40 floors, which make the ROI go to 12 years. Okay, well maybe that one is not good, but you're exactly right. You end up with the opportunity to go through their whole portfolio and find the subset, and you basically categorize them by ROI. And you find the ones that have really good quick ROIs and of course, they pay very fast attention to those and then you start going through the list and they prioritize their own CapEx in the years going forward to do more of these projects. So yes, we are doing just that with not just the hotel and the REITs, but also the property management companies.

You're saying the high end of the building makes a difference?

Well, again, I don't want to spend too much time, Alex, but picture that unit -- that building that you saw on the cover of our presentation, those units are up on the top floor. If the switch gear, the electrical switch gear is in the basement and the boilers are in the basement, that's a whole lot of copper that's going to be run -- to connect it to. I mean, again, you have to -- the things that all that have to be interconnected here are gas, so it's gases coming in on the street and it's got to go up to the top of the building, bathroom expense. So to all of those things and again, I'm -- I know I'm getting very specific on these things, but it basically comes down to ROI. And some buildings have really good ROIs for CHP because of economics, installation, they all come together nicely. Others, not so much because maybe their rates are a little bit different, maybe the constructions are little bit different, and so on.

So there is a realistic possibility that with a hotel chain, you could get quarters for multiple installations all at once and some kind of a capital improvement program that they might begin? Renovating a whole bunch of their hotels all at once? Is that possible.

Sure, sure. Sure. And I think what you end up happening is -- and this is sometimes a hindrance, but you have to deal with that. If CHP installation becomes a part of a much larger renovation in the building. It's kind of the while you're in their mentality, right? While you're putting in CHP, hey, you might as well replace the entire boiler system with this CapEx project. So we become a cog in a much larger wheel, the construction wheel that goes on with these things. But similarly, you're exactly right. If they have a portfolio of 5 or 10 buildings that they assign a capital budget for, then we can knock them down sequentially. That's great. I love it when that happens. One sales call results in 5 orders. But it doesn't always happen that way. But, of course, that's something that we look towards all the time.

We reached the end of our question-and-answer session. I'd like to turn the floor back for closing comments.

Sure. Operator, I see one more question in the queue. If you don't mind, I'd like to take this one last question.

Our next question comes from the line of Roger Liddell with Clear Harbor.

I'll make it brief. I took note of the Washington Gas Light, WGL Energy contract you referred to earlier in the presentation. There must have been considerable investment in bringing that relationship to fruition. Is there anything that you're at liberty to say in terms of the ability to deleverage the WGL opportunity?

Sure. It's -- you're right to recognize that. It is a very valuable relationship. It did take a long time to develop, and we're very happy to get this project announced in May. They're a great group, very financially sophisticated. They were able to put together, for this particular project, the financial package that no other -- I mean, there was competition for this particular site. It wasn't just us going into the Washington Gas, there were many other vendors in there. And we were far and away, obviously, the best equipment. But obviously, the best finances as well package being offered by Washington Gas to get in there. They are, again, a great organization. They are looking to do more projects. I want to do more projects. We're hoping that we can get more projects in the future with them.

Great. And the last question is, I also took particular note of the recent announcement about the Boston office building and the opportunity you've opened up there. What changed? What made it happen that there was a win in Boston? I don't recall one in a number of years. So I take it, this was a big deal potentially, and could you elaborate on that?

Sure. And again, good observation because I've mentioned this to you before, and maybe our audience doesn't know, but Boston is very restrictive, well, is restrictive, totally restrictive to CHP because the type of electrical network they have on there doesn't permit distributed generation in general, not just CHP, but you can't get even get a fair amount of solar panels on a building in Boston because of the electrical network that they're in. And we've tried to have that discussion with Boston and solar guys have and not gotten too far, but -- so it's kind of a no-fly zone, if you will, for CHP. But it isn't a no-fly zone for chillers, and the order that you saw was for some chillers. And that's our way to still -- to be able to penetrate the Boston market, not with CHP but chillers, but, of course, that accomplishes the same thing, you're reducing -- you're increasing their electrical savings, decreasing their electrical demand. In some cases, you can get the hot water as well. So it's a nice way to be able to get into these cities like Boston, I think San Francisco, Bob, is another one, right?

Right.

That has the spot network, a spot electrical network that do not allow CHP but we can skirt that by putting in the chillers. Okay, operator. I think we're all set.

Okay. Are there any closing comments you'd like to make?

No. Except again, thank you all for joining the call, particularly investors, and American DG that might have heard our presentation for the first time. And we're looking forward to the third quarter when we'll have a full quarter of American DG financials integrated to look at. So thank you all for joining us.

Okay, thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.