Greetings and welcome to the Tecogen Year End 2021 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Jack Whiting, General Counsel and Secretary for Tecogen. Please go ahead, Jack.

Good morning. This is Jack Whiting, General Counsel and Secretary, Tecogen. Please note the call is being recorded and will be archived on the Investors section of our website at Tecogen.com for a couple of weeks. The press release regarding our fourth quarter and year-end 2021 earnings, and the presentation provided this morning are available in the Investors section of our website as well. I would like to direct your attention to our Safe Harbor statement included in the earnings press release and presentation. Various remarks that we make about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements. As a result of various important factors, including those discussed in the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q under the caption Risk Factors, which are on file with the Securities and Exchange Commission and available in the Investors section of our website under the heading SEC filings. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. Therefore, you should not rely on any forward-looking statements as representing our views as of any date subsequent to today. During this call, we will refer to certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is provided in the press release regarding our fourth quarter 2021 and year-end earnings and also in the Investors section of our website. I will now turn the call over to Benjamin Locke.

Thanks, Jack. First, I'd like to explain that our earnings release came out a little bit later in the day than is typical. It's up there right now. And, of course, is available on our SEC website. I'm going to cover everything in the earnings release right now. But I just want to start off by saying as the agenda on Slide 4 indicates, I'll do a brief company overview, followed by a detailed review of our fourth quarter and full-year 2021 results. I would like to point out that Bob Panora is not on our call today due to a prior commitment, but is available for any additional discussion offline as needed. We'll then talk about the key takeaways from earnings and turn the call over to the operator for questions. As a reminder, this presentation will be available for download in the presentation section of our investor page on our website. Turning to Slide 5, I'd like to provide a short overview of Tecogen. Tecogen sells and maintains clean and efficient energy systems to provide resiliency and energy savings to customers while reducing greenhouse gas emissions for a cleaner environmental footprint. Our solution helps industries and facilities reach their environmental goals for carbon reduction, while also providing resiliency to grid outages. As seen on this map, Tecogen has deployed thousands of these systems and we have a steady recurring revenue stream to our 11 service centers to provide contracted maintenance to these customers. Turning to Slide 6, many of our distributor generation systems operate as micro grids, as shown on the left here, with the ability to maintain operation during a grid outage. Since our ranking as third in the 2019 study for the number of operational micro grid systems in the United States. We have deployed an…

Thank you, Ben. Tecogen had a successful fourth quarter with higher revenue than previous quarters in 2021, and positive income from operations. Net income was $63,000, or $0 per share. We also generated cash from operations, and our year-end cash balance was $3.6 million. Revenues were $7.18 million, which is a 27% increase compared to Q4 in 2020. The largest gains in revenue were in the Product segment. Our Service revenue, although down in total when compared to Q4 2020, were primarily due to reduced installation activity. Our O&M business was up 16.8%. As we have discussed in past earnings calls, we made a choice to curtail turnkey installations and focus our efforts on the higher margin portions of our business. As a result, overall gross profit margin was 48% in Q4 2021. I will discuss the details of segment revenue and gross profit in a moment. For the full year 2021, our earnings per share was $0.15 per share. Net income was $3.69 million. This was predominantly driven by the forgiveness of the paycheck protection loans and the employee retention credit, and the significant improvement in our gross margin and operating income. I also want to highlight that in fiscal year 2021, we generated cash from operations of $465 thousand. For 2021, our revenue decreased 13.6% compared to fiscal year 2020. The largest change was in the Services segment due to our decision to minimize installation activities. In fiscal year 2021, our operational expenses decreased 23% from $16.7 million to $12.8 million. The fiscal year 2020 OpEx included $2.8 million of goodwill impairment charges associated with our energy production contracts acquired with American DG in 2017. COVID resulted in some facility seizing operations in 2020 as a result, we determined that the underlying contracts were impaired and we reduced…

Thanks. Abinand. Turning to slide 15, I'd like to discuss what I feel the important takeaways from the quarter and the full-year 2021. First, we continue to see a recovery in product sales from the economic challenges due to COVID. While our product sales were down for the year compared to 2020, we finished the year strong with fourth-quarter product revenues coming in at almost 2x product revenues compared to the fourth quarter of 2020. We expect product revenue to continue this pace as demand for our systems continue. Our backlog as of yesterday is $11.8 million, consisting of an even mix of co-generation and chiller systems. It is important to note that our backlog is in the business areas we are focusing on based on growth potential for our clean cooling solutions, such as process cooling and controlled environment agriculture facilities. As I mentioned in the earnings release today, controlled environment agriculture is a fast-growing industry we are focusing on, given the tremendous benefits of our clean cooling solutions. We have dozens of facilities using our systems to reduce energy costs and dependence on the grid, while many more in design as the growth needs for yearlong high value crops increases. Part of our focus on expanding chiller sales, is through the expansion of our sales network by adding manufacturers, representatives, and sales agents in geographies and markets where we see the most potential for our cooling products. These sales partners are an important way to cost effectively reach customers for our products and establish long term sales networks in new and expanding geographies. In 2021, we established three new manufacturer representative agreements and three new strategic partnership arrangements for our clean cooling products. While each of these arrangements will lead the different degrees of sales return, the agreements…

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions]. One moment, please, while we poll for questions. Our first question today is coming from Amit Dayal, from H.C. Wainwright. Your line is now live.

Hi there, Amit.

Thank you. Hi. How are you guys doing? thank you for doing [Indiscernible]

We're doing well, thank you.

Good to see you guys making progress as the economic recovery is taking place, and your financials are starting to reflect that. With respect to the 2022 outlook, are we going to be dependent on any particular end market to drive growth, or are you seeing that you'll need to fill us in your key segments?

Yes, sure. I think where our backlog is and by the way, our backlog is entirely product. There's no more installation activity planned right now. We might have some little bits of installation come up in the future, but as Abinand indicated, most of that installation activity was finished up in 2020, 2021. So the backlog is entirely product, which means that much more near at hand, which is good. And it's a pretty even mix of co-gen and chillers. The chillers are not just indoor cultivation, of course, we're doing very well with that and we're wise to focus our resources on that which we're doing well in. So we continue to do -- focus on that, but we're also still selling the chillers to our traditional multi-unit residential and hospitals and assisted care facility. So all the verticals are still intact. It's just the indoor cultivation one is really doing well for us. And it's -- and the co-gen sales of course, are there as well we had a nice order. You might have seen Amit about a month ago, what was chillers and Tecogen and it was really a good testimony to the model of [Indiscernible]. Here's your facility, you want to reduce their massive electric load. Let's first put all their chillers on gas, which is what we did, three Tecochills, 1600 tons. And then whatever power needs they need afterwards, let's put a bunch inverters. So we put in eight or so inverters in that site and it was a nice, tidy, efficient solution and that's the type of things that we're seeing more of. So again, in summary, I think we're seeing the main verticals we've always seen. There's not so much incentives anymore. I understand that New York incentives aren't there anymore. Massachusetts incentives are starting to go away. I think it's important that we're finding traction in these markets without incentive, because natural market drivers are bringing them to us. So I hope that answers your question.

With respect to these new air-cooled chillers that you are looking to maybe launch later this year or early next year, can you give us a sense of the market opportunity, sales strategy, and whether this product line maybe cannibalize your existing offerings?

Yes. Sure. And the answer the quick answer is no. Absolutely not, completely complementary. In terms of how industrial chillers are done, you either have a chilled-water loop with a cooling tower or like a hospital will have, or another facility won't want to have all that infrastructure. They want a -- want to have a cooling tower and a chilled-water loop, they just want to have an air-cooled chiller that vents its excess heat to the atmosphere, not to this cooling tower. And so as you walk down the street, for every two big buildings or every five big buildings, two of them have -- maybe one or two of them have circulated hot-water cooling tower. The other three or four all have air-cooled chiller. So is indeed a gap in our offering. Indeed, sometimes and where we're doing sales, we're not trying to necessarily sell them on the Tecochill, we're trying to sell them on at chilled water loop, which is a more sophisticated and industrial scale away to cool buildings. But some people just opt for air-cooled solution because sometimes that's an easier infrastructure, the thing to do. So we've got an air cooled product, we had for many years but it's not very sophisticated and it certainly didn't have -- not up to the efficiency of some of these sealed bearing compressor technologies that are out there that are super-efficient. So what this new product is going to be is, it's going to be an air-cooled chiller so now when we come across those buildings that don't want to have a chilled-water loop, they want to put on an air-cooled chiller, we've got a solution for them. It's not something that's antiquated technology [Indiscernible] that's using all hermetically sealed compressor technology that's out there today. So it's completely complementary to us. And I'll let Abinand maybe chime in a little a bit too because he has some market perspective as well.

Yeah. I think one of the key things with this air-cooled chiller is it brings the advantage of the existing Tecochill, which is the combination of hot-water and chilled water at the same time. But also it does a few other special things. One is it can run on both the electrical grid or the engine, or a combination of the two. And then on top that, as Ben already mentioned, right? It doesn't need a cooling tower. So what this allows us to do is to go after some of the process cooling market that we're just not able to address right now. So you look at a lot of the places where you end up using a cooling system, not everything needs a larger system as we currently sell. And then on top of that, there is a lot of places where you want additional resiliency by having the engine and the grid. And you particularly look at the lab market or the biotech, or a lot of the food for us I think. There are certain areas where we bring some real big advantage so we can bring that air-cooled chiller on there. And you might -- it also allows us to hit buildings that are a little smaller. So right now, even on the cannabis side, just to give you an example there, we need about a 200-ton chiller, so one of our smaller chillers for every 10,000 square feet. But if you have a facility that's a little smaller than that, then they may not want to put a cooling tower in there. With the air-cooled chiller, you can go out there, you can put this in very quickly, so you get a much larger segment right now. Typically, the air-cooled segment tends to sell in two times, three times, sometimes even four times the number of volume compared to a water-cooled system. And especially in the markets that we're targeting where we can bring that hot water and the chilled water at the same time, we can bring the same savings that we have with our other chillers, but really go and disrupt some of these other process cooling markets.

Understood. Thank you for that. And just maybe on the operating cost side, in terms of outlook, what should we look for 2022 similar levels for 2021 or any other investments or increases in expenses that may take place this year?

We're expecting pretty similar OpEx -- other than the usual cost of living type changes that every company goes through, we're expecting pretty similar OpEx numbers. We're -- one thing that you will see quarter-to-quarter, and I want to highlight this, is our selling expenses sometimes will change quarter-to-quarter depending on how much is done through the manufacturer's reps. And that just -- we pay external commissions that just moves are selling expense number up or down quarter-to-quarter. The baseline number should remain pretty constant 2021 to 2022. We are not expecting any large changes or any major changes within the Company.

Okay. Alright. Thank you, guys. That's all I have now. I have no other questions.

All right. Thanks for your time Amit.

Your next question today is coming from Michael Zuk from a private investor. Your line is now live.

Hi there Mike.

Good morning, Ben. Congratulations on a very successful year. My question is directed towards geographies. Can you give us an update on what we're doing to New York City and in Florida and in California?

Sure. I'll go respectively. So in New York, as I mentioned, the incentives aren't there anymore, but that's fine. Those incentives were good, but they have a lot of strings attached that we're kind of a pain in my neck in terms of closing out projects, etc. But I will tell you that the economic drivers in New York stand on their own right now.

Electric rates were just -- so Mike, of course, with the ADG assets, we get pretty good visibility at electric rates and they're going up. And what was maybe an okay value proposition in New York is now a more compelling value proposition. So I think the economics in New York are getting stronger and we had to take it upon ourselves to revisit some of the projects that will now have very compelling economics. So even without the incentive and even with this sort of natural gas kind of sideways looking thing that's going on in New York, the economics is going to stand for themselves. So I think New York is just what's rising electric rates is going to still be a market for us. Florida indeed still continues to be there. The fact that we've got a service center down there now has helped our ability to attract new projects and how we can reach in the Georgia a little bit. In fact, so we're looking at some grow operations there. It seems to be mostly chillers, I think in Florida, Mike, because the spark spread is the way it is. But because there's a lot of industrial growth facilities and just a lot of industry down there in Florida in general, the chillers are where we're finding a home. California, Mike still is a challenge, I mean, they got spark spread and everything, but they have a lot of difficulties and biases against on-site generation that make it more difficult for us. And I think what my hopes and dreams are for California these days Mike is in the cannabis industry, getting themselves on their feet and they're fiddling around in California, they've got this big California City project going on there and they're issuing permits, but it's a very -- it's not the same process that -- an orderly process, like for example, we followed in Massachusetts and we're following in New York and following with New Jersey in terms of how they put out permits. They put up permits to anybody and it becomes very difficult to track down who's actually doing what. But my long way of saying, my hopes and dreams for California really reside with the indoor cultivation side of things. Just because on-site generation continues to be a bit of a prickly point for the utilities out there. Unless you're solar or cold fusion or some other such thing.

Perhaps opportunity. Is there any opportunity in EV, charging stations using our systems?

Sure. We've thought about that. Mike. And indeed, you get these remote locations that maybe can't get enough 3-phase power there to do the fast charges that are needed. You can't just have the slow charges you need to have the power infrastructure to do the fast charging and you need to be able to do them on a, on a big scale, these speedways and highways etc. And so indeed, that's an opportunity, Mike, we're kind of up against other things that might be able to do the same thing. Ideally, we could find, of course, a home for our unit that could do all that and provide the heat for some useful purpose. So that you are indeed getting that full efficiency of our system down there as opposed to just having some generating asset, like the cartoon of an EV plugged into a box of house. And there's a big diesel genset inside the house. We don't want to be that. We want to be efficient. So finding those opportunities is a little more challenging.

[Indiscernible]

Sorry.

[Indiscernible]

More commentary to that because he is actually looked at EV chart and you were looking at from a solar side back then.

But I wanted to actually also address the earlier thing of the New York market. Because New York City is one thing, but what we're also finding of the greater, New York area is still very, very active for us. Because you look at, I mean not just, when I say greater New York, I'm including New Jersey as well as Long Island as some of the surrounding regions, because they've seen much higher electrical rates. And there's still continues to be a lot of demand for both Tecogen as well as the chiller products. And I think that's going to continue to be the case. And I mean, we're still doing projects in New York without an issue, but a lot of markets, other parts of the country as well that earlier may not have had as much of a liability because of the low electrical rates are now starting to become much more viable like Michigan, sort of Memphis, those kind of areas are starting to get much higher rates, more driven towards time of day type rate. Again, that favors our chiller products, so you're likely to see things from our -- from us over the next few years where markets where we didn't operate in might actually be completely viable.

And then as a follow-up. Is there anything happening in Canada? I know the relations between the United States and Canada are somewhat strained, but we had made significant progress in Canada, any updates on what's going on there?

Yeah. Well, the biggest update is that that fleet's running fantastically. The up time of those 31 units or whatever it is that we got on the contract I mentioned a few months ago is phenomenal. And that's a great thing for our service revenue. That increase we saw in service O&M, Mike, that 16% or whatever it was quarter-over-quarter, large part from that Toronto facility running and that's going to happen every quarter for the next 20 years, so that's pretty promising. Now in terms of new opportunity up there, first off, any type of trade or international, nothing really matters to us there. It's -- nothing is really inhibiting us there. There are opportunities. I think where we are seeing opportunities up there, again, it comes down to these indoor cultivation facilities. They have a lot of clean power up there, Mike. So some of the natural drivers aren't there because they've got all the hydro up there. So the carbon footprint for the grade is pretty good. But I think where we're starting to see drivers again, are these facilities where they just need more power than the grid can give them. They need three megawatts, and the grid can only give them one. And so they are looking for supplemental power. So we're making progress up there. Getting Toronto service up and running to its fullest potential was our main goal in 2021 to be sure. And we got that done, and now that those fellows that are up there can start to look at other business development opportunities up there. It's pretty key to have -- it's important to have a guy on the ground to be able to look at these opportunities and find them. So hopefully, will be getting more business up there.

In that answer do I glean that we have direct sales and Canada, are also pursuing manufacturers reps?

Yes, it's a good question Mike. So we don't have a direct sales up there per se. The guy we have up there is the guy that's managing the fleet. But of course he's a smart fella and he is -- he can hold his end of a conversation with a potential customer and walk a facility. And that's exactly what we want out of these service supervisors. But he's not a sales person per se, he probably hit me if he thought he told me he has anything to do with sales. But importantly though, we are starting to establish some arrangement, these three partnerships that I mentioned occurred in 2021 without giving too much detail of them, have geographies that go into Canada. Some of those partnerships were based not on geography, but based on a market vertical. For example, indoor cultivation. So we do have some indirect sales resource up there.

And then any potential [Indiscernible] this market.

Say that again, Mike.

Any potential in the Texas market.

Oh, Texas. Yes. Sure. We spent a little time in Texas, but I will tell you now that the spark spread is really difficult there. The electric rates are pretty inexpensive. Despite everything that happened of course, a few years ago with that -- with [Indiscernible], everything. Electric rates are pretty good down there and we might -- and I think we've got -- we do have a -- you might remember [Indiscernible] is our partner for Tecofrost. Like they'll build and they'll provide the refrigeration component of our Tecofrost. And so we're kind of shoulder to shoulder with [Indiscernible] trying to sell these refrigeration market. And they've got folks in Texas that we've been interacting with and trying to see if there's a good market for it there. But I was just -- if the spark spread isn't there, I'd much rather focus my valuable resources on where it is, rather than try to find something that may not be there. So we've got our eyes on Texas, but it's just not in my top ten Mike, to be honest with you.

Again, congratulations for a good year and I think that you've directed the company in the correct areas where the growth and the profits are. And I look forward to a very productive 2022. Thanks.

Thanks, Mike. And just a note on that. We fully intend to keep it up, right? That's the goal here. Keep up those product revenues, the service keeps growing. We're profitable this quarter. All the cost changes that we made and all the improvements we had aren't temporal, they're long lasting. We're running the company in a very lean manner right now. So I'm really looking forward to keeping us up.

Thank you. [Operator Instruction] Our next question is coming from Alexander Blanton from Clear Harbor Asset Management. Your line is now live.

Hi, good morning.

Hi, Alex, how are you?

Have you published the backlog figure?

Yeah. The backlog that was $11.8 million, Alex and yeah, that was within the -- is in the press release. Actually, I don't think it was in the press release, it was in the earnings. But it's $11.8 million, and that's, Alex, our product, there's no install on that.

Where do we see that, it's not in the press release?

Yeah, it's not in the press release. It's in the earnings presentation, Mike, which is on -- again on the website.

This is Alex.

Oh, yeah. Sorry, I was just talking with Mike. Thanks, Alex.

Well, the presentation is not on the website, at least I can't find it.

Yeah. If you go to the Investors section of the website and click on that black bar on. It should be there Alex. But I think what we'll do is we'll just email to you just to make sure that you have it. It's easy enough for us done.

Well, shouldn't it be with the third quarter presentation, there's a fourth quarter presentation?

Yeah, it should be on there Alex. And if it's not on there, it's because I've been arm wrestling with our IT provider all morning. That's why our earnings came out a little bit late as well. So if it's not on there right now, it will be very shortly.

Does it include a breakdown of the backlog according to markets?

It does indeed, Alex.

A pie chart?

Yes, it does indeed. And I can tell you what it is and I'm sorry, you can't access it very quickly. But I'll go by size. Some multi-unit residential still remained strong at 20%. The CEA space, looking at a controlled environment agriculture is up to 27%. That's higher than it's been in the past. Hospitality hotel 40%, Healthcare, 11% other, which is a mix of universities and some assisted living is about 30%. So the indoor cultivation right now is almost a little under a 1/3 of what the pie chart is.

So what were the big contributions to the backlog getting the fourth quarter, the orders? We didn't really get a lot of order news during the quarter, so I don't really have a feel for that.

Yes. Sure. I think -- and just by way of editorial comment here. We're trying not to put out press releases on every little lower here because I think it becomes an echo chamber and they cost money. Right, and so I would rather just announce the ones that are material. And I think that the material orders that you've probably would've seen, of course, where there's one where we had a combination of co-gen. And chillers. I didn't mention the geography. I'm trying to be very respectful over the facility, but it was 69 tons of chillers and these eight co-gen units. So that's something that's material and that went into the backlog and we're working away on those units right now.

Okay.

Yeah, that -- and then we had another one, Alex, in January, where we had a New York Hotel that wanted to actually expand upon. We have some chillers there now, they want to put in some co-gen. Again, this is this model that we're seeing, where there's, the first thing I did is I'm a smart person, I put in your chillers. Now I'm trying to be even more smart by putting in some of your marginal co-gens and that's exactly what this hotel did, they're putting in a megawatt of our co-gens to supplement that facility. So those are -- those two big ones, that first one was in November, the 2.5 megawatt system for controlled environment agriculture. The one-megawatt for the hotel was in January. Those are pretty decent component of our backlog. The rest of it, Alex, there's some cats and dogs, some couple of new varieties in there. There's a few STX's, there's a few of our Teco powers in there that I didn't feel was relevant to announce on a one-z, two-z basis. It's the big orders that I think -- that are representative of the markets that we're going after that we're trying to publicize anyway.

That Hotel, New York City. Is it?

It is in New York City, in the five boroughs.

Is this a hotel as part of a chain or just a standalone?

Can't tell you Alex. This guy, I will tell you Alex, the developer of this hotel, this owner of this hotel is a really big fan and he really appreciates what we're doing and helping them with. And as such, I'm trying to be very respectful of his own brand and how he chooses to represent himself. I would never want to have my bragging about having my equipment in there go against how he's -- however, he is positioning the hotel. There might be a joint press release in fact, once we get these things running later this year, but I'm certainly deferring to his own judgment on that.

That would be really welcome. That kind of publicity for the company. The reason I was asking was if you get a chain of hotels to adopt your equipment, that would be very welcome. So that's why I was asking that question. Another question on California, you said that in California that utilities were prickly about on-site generation. Could you fill in a little bit on that? What is the reason for that?

Yeah. Well, it really depends on the type of on-site generation. If you're using a fossil fuel to do on-site generation, like natural gas, then you're not eligible for any of the SGIP benefits, incentives. You are eligible for the standby tariffs and the non-by passable charges that take a very good adjustable electric rate and makes it less addressable. Instead of $0.16 per kW while the non - by passable charges $0.03, the standby charges this. It does become a very good economic proposition. It's really the way that fossil on-site generation is differentiated from other types of on-site generation. Which is a bit frustrating. I think I probably said this to you, Alex. Fuel cells are out there. Yeah, they can run on hydrogen. That's great. But there's no hydrogen out there, so what are their running on? Natural gas, which is a fossil fuel. But they get special dispensation for doing that. It's electron discrimination. But what can I do about that? I'll tell you what I tried to do about that, Alex. I tried to beat the system in a different way by, again, going after their cooling loads. And the cooling load, if I put a 200-ton chiller in there, well now I am addressing that full $0.16 electric load that's now being mitigated.

Do they care about whether or not there's any carbon emissions from your generation units?

Of course -- of course, yeah.

Did they put that into account? Because if there isn't any what's their objection?

Yeah. Well, I guess they would say Alex and on the [Indiscernible] of time our grid is going to be clean 24/7. And therefore, any alternative to the grid would be a bad alternative. Now of course, that's true for maybe a few hours a day when the sun is shining and in the greater than [Indiscernible] clean.

How are they generating zero electricity?

That will all again, it's a combination of solar, but when the sun goes down on the wind stops blowing, it's the same combined cycle

You're not doing the whole thing from green energy, but [Indiscernible] you providing it, is that it?

Yeah, Alex. And believe me, we're both scratching our head looking over there about why they think the way they do. But I can't change that. But what I can do, is be clever and that's what I'm trying to do with this hybrid drive, which is okay, look fine. I admit it, the grids better than me, sometimes of the day. I'll just defer to you. And this chiller is going to make -- keep your building cool, while I seamlessly transition over to this perfect imaginary grid, right? But again, when the sun goes down and the wind stop blowing, we would seamlessly transition right back to the gas engine drive, right? Because now we're cleaner than the grid and it's not one of the other, it could be a 100/0, 80/20, 60/40, 50/50 and ramping on downwards. That's the beauty of this hybrid drive is we can take the right blend of those two together. But that's the way I'm going to be successful in California Alex. Is with this hybrid drive that acknowledges this notion at the grid is going to be cleaner most parts of the day. And I would say fine, however you clean, I'll run on you, but when you're not clean, all run on what I normally run on. And so that's the way I think I see ourselves getting around this little conundrum of California. So I hope that kind of makes sense to you.

Yeah and finally, as one final question. You said your cash went up in January. What was the reason?

Hard work and collections

Okay. [Indiscernible]

You might have noticed -- maybe you didn't notice Alex; our unbilled revenue number went down. And so slowly chipping away at that you might remember what the unbilled revenue number is there, Alex. It's this New York incentive that was tiered one-thirds, two-thirds, three-thirds. And that three-thirds that lasted was -- required every eye to be dotted in the perfect surf and so on. And so we've been chipping away at that and making good progress on that. But again, part of it is just being a little bit more smart about our collections. And an unbenounced, certainly this team have been doing a lot.

So, some of it Alex is also because of the type of products we're selling now with the chillers. We -- because we essentially have a much stronger -- we have very little competition that we're able to get a much larger deposit out of clients before the units even ship. So generally our cash cycle is much better than it's ever been. And then on top of that, of course, collections and then the combination of collecting all this rebates that we have outstanding from NYSERDA and various entities.

Okay. Thank you very much.

Alright, Alex. I always appreciate your time and I'm going to go ahead to send you the presentation one way or the other so you'll have it.

Thank you. We appreciate our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments?

Well, I guess, thank you everyone for your participation and listening to our earnings call. We're pretty excited about what we've accomplished here in 2021 and it's not too long from now that will be having our Q1 results and we're pretty excited about what we'll be talking about then. So until then thank you for investing in Tecogen and we're happy to take any questions if people want to reach out to us directly.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.