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HydroGen Corporation Reports Results for the Fiscal Year Ended December 31, 2005

Posted on: Friday, 31 March 2006, 18:00 CST

HydroGen Corporation (OTCBB: HYDG), a development stage company that manufactures multi-megawatt air-cooled phosphoric acid fuel cell (PAFC) systems through its wholly-owned subsidiary HydroGen LLC, announced its financial results for the year ended December 31, 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 the company to design, manufacture and sell 6-30 megawatt (MW) turnkey power plants, based on a standardized 2MW power island consisting of five of HydroGen's 400-kilowat (kW) modules. Additionally, HydroGen plans to attempt to generate recurring 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.

Recent Operational Highlights

-- HydroGen Corporation awarded $1,000,000 by the State of Ohio

Third Frontier Fuel Cell Program (TFFCP) to support the

company's advanced manufacturing development program. HydroGen

will use the funds to optimize decisions and resource

allocations for its planned advanced manufacturing facility to

be located in Ohio.

-- Mr. William F. Copeland appointed Manager of Manufacturing.

With more than 26 years of diverse manufacturing, Bill will

play a critical role in the orderly and systematic transition

of HydroGen's technology from its origins at Westinghouse to

today's manufacturing practices and paradigms.

-- HydroGen appointed three new members to its Board of

Directors. Mr. John Freeh, Dr. Howard-Yana Shapiro and Mr.

Brian Bailys joined the Board as directors, expanding

HydroGen's Board to five members.

"Since becoming a public company in July of last year, we have made considerable progress in our mission to become the first fully profitable manufacturer of stationary fuel cells for power generation," said Dr. Leo Blomen, Chairman and Chief Executive Officer of HydroGen Corporation. "In addition to successfully raising more than $14 million and establishing our day-to-day manufacturing operations in Versailles, Pennsylvania, we obtained two awards from the Ohio Department of Development, which will support the planned commercial demonstration of our product this year at a customer site to be named, and greatly accelerate our advanced manufacturing development work in that state."

Joshua Tosteson, President of HydroGen Corporation, added: "Based on the significant interest in alternative energy and strong environmental and energy cost pressures on our customer base, we are advancing in our operational and strategic growth plans in line with our expectations. We are targeting 2008 for the construction of an advanced manufacturing facility with an initial production capacity of 25 MW per year of our 400-kW modules, which will later be expanded to 100 MW per year capacity. We will require these production capacity increases to serve our customers, as energy demands increase and companies look for effective and reliable ways to manage their energy costs and environmental emissions. We are moving forward in our commercial negotiations with our active pipeline of potential customers."

Fiscal 2005 Year-End Financial Results

For the year ended December 31, 2005, HydroGen's net loss was $5.7 million, or $(2.18) per share, based on the weighted average of 2,631,633 common shares outstanding. This compares to a net loss of $1.7 million for 2004, before the Company's recapitalization on July 7, 2005. Results for the fourth quarter and year ended December 31, 2005 include a non-cash charge of $875,000, which relates to the Company lowering the conversion price of its convertible notes.

HydroGen's cash, cash equivalents and short-term investments at December 31, 2005 totaled $9.3 million, as compared to a $1.23 million cash balance at December 31, 2004. Spending on research and development for the year ended December 31, 2005 grew to $1,164,000, an increase of 369% over 2004. The increase in research and development expenses was due to the accelerated and expanded ramp-up in HydroGen's manufacturing and development activities in 2005. The company used $3.78 million net cash in operating activities for 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 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 the adoption of fuel cells are present.

Forward-Looking Statements

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act 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 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 CONSOLIDATED BALANCE SHEET DECEMBER 31, 2005 -------------- ASSETS ------ CURRENT ASSETS -------------- Cash and cash equivalents $ 2,796,324 Short-term investments 6,493,482 Accounts receivable 40,042 Other current assets 316,634 ------------- TOTAL CURRENT ASSETS $ 9,646,482 Property and equipment, net 807,372 Equipment deposits 224,896 Other assets 14,373 ------------- TOTAL ASSETS $ 10,693,123 ============= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES ------------------- Accounts payable and accrued expenses $ 612,961 ------------- TOTAL CURRENT LIABILITIES 612,961 ------------- Common stock, par value $0.001, authorized 65,000,000 shares, 7,614,904 issued and outstanding 7,615 Series B convertible preferred stock, par $0.001, authorized 10,000,000 shares, no shares issued or outstanding - Additional paid-in capital 17,970,255 Accumulated deficit (7,897,708) ------------- TOTAL SHAREHOLDERS' EQUITY 10,080,162 ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 10,693,123 ============= HYDROGEN CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, ------------------------- 2005 2004 ----------- ----------- Demonstration Grant Revenue $ 40,042 $ - Costs and Expenses (including stock based compensation of $626,019 and $638,830, respectively) 4,538,347 1,639,138 ----------- ----------- LOSS FROM OPERATIONS (4,498,305) (1,639,138) ----------- ----------- Interest income 196,253 1,164 Interest expense (564,145) (96,680) Charge for repricing conversion price of convertible debt (875,000) - ----------- ----------- NET LOSS $(5,741,197) $(1,734,654) =========== =========== Weighted average common shares outstanding (basic and diluted) 2,631,633 - =========== =========== Net loss per share (basic and diluted) $ (2.18) - =========== ===========

Source: Business Wire

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