HydroGen Corporation Reports Results for Fiscal Third Quarter 2005.CLEVELAND Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and -- HydroGen Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : HYDG), a development stage company that manufactures multi-megawatt air-cooled air-cool tr.v. air-cooled, air-cool·ing, air-cools 1. To cool (an engine, for example) by a flow of air. 2. To air-condition. Adj. 1. phosphoric acid fuel cell Phosphoric acid fuel cells (PAFC) are a type of fuel cell that uses liquid phosphoric acid as an electrolyte. The electrodes are made of carbon paper coated with a finely-dispersed platinum catalyst, which make them expensive to manufacture. (PAFC PAFC Phosphoric Acid Fuel Cells PAFC Plymouth Argyle Football Club (UK) PAFC Port Adelaide Football Club ) systems through its wholly-owned subsidiary HydroGen LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , announced its financial results for the third quarter and nine months ended September September: see month. 30, 2005. HydroGen is in the development stage and is expected to remain so for at least the next several quarters. HydroGen's business plan calls for it to design, manufacture and sell 6-30MW turn-key See turnkey system. (jargon, application) turn-key - A term which describes a complete system (hardware and software) which can be used for a specific application without requiring further programming or software installation. power plants, based on a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. 2MW power island consisting of five of HydroGen's 400kW modules. Additionally, HydroGen plans to attempt to generate recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues from the sale of operations and maintenance services, and ongoing lease revenues for the 400kW modules, which must be replaced after approximately 40,000 hours of operation. Third Quarter Operational Highlights --HydroGen LLC completed a $13.5 million equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. and reverse merger transaction with Chiste Corporation in July July: see month. , 2005; HydroGen Corporation sold common stock for gross proceeds of $600,000 in a private placement to two institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. in September 2005. --Shareholders approved the name change to HydroGen Corporation from Chiste Corporation and a 1-for-25 reverse split of the common stock effective August 19, 2005. --The State of Ohio Department of Development awarded HydroGen Corporation a $1,250,000 grant on a reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. basis to construct a 400 kW commercial demonstration PAFC power plant. --The U.S. Department of Energy granted exclusive license to HydroGen Corporation for four patents related to air-cooled PAFC technology. "During the past several months, we have built a strong foundation from which to launch our strategic growth plan," said Dr. Leo Leo, in astronomy Leo [Lat.,=the lion], northern constellation lying S of Ursa Major and on the ecliptic (apparent path of the sun through the heavens) between Cancer and Virgo; it is one of the constellations of the zodiac. Blomen, Chief Executive Officer of HydroGen Corporation. "We became a public company, successfully raised more than $14 million and obtained a grant from the Ohio Department of Development, providing us sufficient capital to execute the current phase of our business plan. To support our commercialization and marketing efforts, we have hired key technical personnel and established a new production facility in Versailles, Pennsylvania Versailles is a borough in Allegheny County, Pennsylvania, United States. The population was 1,724 at the 2000 census. Despite being named after the extraordinary Palace of Versailles, the name of the borough is almost universally pronounced ver-sales . With the achievement of these important milestones, HydroGen is now well positioned to capture the significant market opportunities that we have identified, and we are hard at work in cultivating these." Joshua Tosteson, President of HydroGen Corporation, added: "We have completed several important steps along our path to manufacturing and installing multi-megawatt power plants based on our simple and inexpensive 400 kW air-cooled phosphoric acid fuel cells. Over the next few quarters we will manufacture, deploy and demonstrate the company's core product in partnership with the Ohio Fuel Cell Initiative and commercial partners to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. . Additionally, we will begin preparations to expand our production capacity, with a target of 25MW/year in 2008, and will move forward in our commercial negotiations with our active pipeline of potential customers. These activities will move us significantly down the path toward full commercialization of our technology, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with our business plan." Third Quarter Financial Results For the quarter ended September 30, 2005, HydroGen's net loss was $1.99 million, or $(0.68) per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, based on the weighted average of 2,910,581 common shares outstanding. This compares with a net loss of $0.53 million for the quarter ended September 30, 2004 when the company was privately held. For the nine months ended September 30, 2005, HydroGen's net loss was $4.52 million, or $(4.61) per share, based on the weighted average of 980,855 common shares outstanding. This compares to a net loss of $1.03 million during the first nine months of 2004, before the Company's recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. on July 7, 2005. Results for the three and nine months ended September 30, 2005 include a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $875,000, which relates to the Company lowering the conversion price of its convertible notes. HydroGen's cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments at September 30, 2005 totaled $11.15 million, as compared to a $1.23 million cash balance at December 31, 2004. Spending on research and development for the three months ended September 30, 2005 grew to $0.35 million, an increase of 333% over the same period in 2004. The company used $2.74 million net cash in operating activities for the nine months ended September 30, 2005. About HydroGen Corporation and HydroGen, LLC HydroGen Corporation, through its wholly-owned subsidiary, HydroGen, LLC, is a developer of multi-megawatt fuel cell systems utilizing its proprietary 400-kilowatt phosphoric acid phosphoric acid, any one of three chemical compounds made up of phosphorus, oxygen, and hydrogen (see acids and bases). The most common, orthophosphoric acid, H3PO4, is usually simply called phosphoric acid. fuel (PAFC) cell technology. Utilizing fuel cell technology originally developed by Westinghouse Corporation, the company targets market applications where hydrogen is currently available and other drivers favoring favoring an animal is said to be favoring a leg when it avoids putting all of its weight on the limb. A part of being lame in a limb. the adoption of fuel cells are present. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are inherently unreliable and actual results may differ materially. Examples of forward-looking statements in this news release include statements regarding HydroGen's anticipated economically competitive fuel cell systems. Factors which could cause actual results to differ materially from these forward-looking statements include such factors as fluctuations in demand for HydroGen's products, HydroGen's ability to maintain strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of HydroGen's liquidity and financial strength to support its growth, and other information that may be detailed from time to time in HydroGen's filings with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission. HydroGen undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
HYDROGEN CORPORATION AND SUBSIDIARY
(formerly HydroGen, L.L.C.)
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2005 2004
------------ -----------
(unaudited)
ASSETS
------
CURRENT ASSETS
--------------
Cash and cash equivalents $ 8,103,052 $ 1,230,056
Short-term investments 3,043,932 -
Other current assets 152,484 2,515
------------- ------------
TOTAL CURRENT ASSETS $ 11,299,468 $ 1,232,571
Property and equipment, net 227,227 4,415
Other assets 14,373 -
------------- ------------
TOTAL ASSETS $ 11,541,068 $ 1,236,986
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIENCY)
------------------------------------
CURRENT LIABILITIES
-------------------
Accounts payable and accrued expenses $ 242,432 $ 289,974
Note payable, related parties - 617,360
Convertible notes payable, net of
discount of $387,839 at December 31,
2004 - 1,242,161
------------- ------------
TOTAL CURRENT LIABILITIES 242,432 2,149,495
------------- ------------
Common stock, par value $0.001,
authorized 65,000,000 shares, 7,612,940
issued and outstanding $ 7,613 -
Series B convertible preferred stock, par
$0.001, authorized 10,000,000 shares,
433,566 issued (stated value and
liquidation preference of $34.62 per
share) - 434
Additional paid-in capital 17,959,356 1,094,758
Accumulated deficit (6,668,333) (2,007,700)
------------- ------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY)
11,298,636 (912,508)
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY) $ 11,541,068 $ 1,236,986
============= ============
HYDROGEN CORPORATION AND SUBSIDIARY
(formerly HydroGen, L.L.C.)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED
ENDED SEPTEMBER 30, SEPTEMBER 30
----------------------- -------------------------
2005 2004 2005 2004
----------- --------- ----------- -----------
REVENUES $ - $ - $ - $ 767
-------------------- ----------- --------- ----------- -----------
COSTS AND EXPENSES
------------------
Cost of revenue - - - 443
General and
administrative
expenses 1,194,077 519,675 3,177,272 1,015,920
----------- --------- ----------- -----------
TOTAL COSTS AND
EXPENSES 1,194,077 519,675 3,177,272 1,016,363
----------- --------- ----------- -----------
LOSS FROM OPERATIONS (1,194,077) (519,675) (3,177,272) (1,015,596)
----------- --------- ----------- -----------
Interest Income 84,118 - 93,663 -
Interest Expense (2,991) (6,926) (564,112) (15,959)
Charge for
repricing on
conversion of
convertible debt (875,000) - (875,000) -
----------- --------- ----------- -----------
NET LOSS $(1,987,950) $(526,601) $(4,522,721) $(1,031,555)
=========== ========= =========== ===========
Weighted average
common shares
outstanding (basic
and diluted) 2,910,581 - 980,855 -
----------- --------- ----------- -----------
Net loss per share
(basic and
diluted) $ (0.68) - $ (4.61) -
----------- --------- ----------- -----------
NOVEMBER 11,
2001 (INCEPTION) THROUGH
SEPTEMBER 30, 2005
------------------------
REVENUES $ 96,660
-------- ---------------------
COSTS AND EXPENSES
------------------
Cost of revenue 1,780
General and administrative expenses 5,169,731
---------------------
TOTAL COSTS AND EXPENSES 5,171,511
---------------------
LOSS FROM OPERATIONS (5,074,851)
---------------------
Interest Income 94,827
Interest Expense (675,397)
Charge for repricing on conversion of
convertible debt (875,000)
---------------------
NET LOSS $ (6,530,421)
=====================
Weighted average common shares outstanding
(basic and diluted) -
---------------------
Net loss per share (basic and diluted) -
---------------------
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