Stockholders' equity:

12 Months Ended

Dec. 31, 2011

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 5 — Stockholders’ equity:

Common Stock

In July 2010, the Company invested $45,000 in exchange for 45 million shares and obtained controlling interest in EuroSite Power, a newly established corporation. Also in July 2010, Nettlestone Enterprises Limited invested $5,000 in exchange for 5 million shares in EuroSite Power. During the period from July to December 31, 2010, EuroSite Power raised an additional $2,261,000 in a private placement by selling 2,261,000 shares of EuroSite Power common stock to accredited investors at a price of $1.00 per share.

On July 12, 2010, the Company raised $1,000,000 in a private placement of 400,000 shares of common stock at a price of $2.50 per share. The Company also granted the investor a special purchase right, or warrant, regarding the Company’s EuroSite Power subsidiary. The warrant grants the investor the non-assignable right but not the obligation, for a period of two years from July 12, 2010, to purchase up to 400,000 shares of the common equity of EuroSite Power at a per share purchase price of $1.00.

On December 9, 2010, the Company entered into subscription agreements with selected investors for the purchase of units consisting, in the aggregate, of 500,000 shares of its common stock and warrants to purchase 500,000 shares of its common stock (see “Note 6 – Warrant liability”). The subscription agreements provided for the purchase of the units at a purchase price of $2.50 per unit, and the warrants had an exercise price of $3.25 per share of common stock. Canaccord Genuity Inc., or Canaccord, acted as placement agent, on a reasonable efforts basis, for the offering and received a placement fee equal to 6.0% of the gross proceeds of the offering (excluding any consideration that may be paid in the future upon exercise of the warrants). The Company also reimbursed certain expenses incurred by Canaccord in the offering. The offering was made pursuant to the Company’s shelf registration statement on Form S-3, which became effective on October 6, 2010.

The holders of common stock have the right to vote their interest on a per share basis. At December 31, 2011, there were 45,001,404 shares of common stock outstanding.

Warrants

In March 2010, certain investors including George N. Hatsopoulos and John N. Hatsopoulos exercised 500,000 warrants with an expiration date of April 5, 2010, providing gross proceeds to the Company of $350,000.

On January 15, 2011, the company signed an investor relations consulting agreement with AIM Capital Corporation d/b/a Barry Kaplan Associates, or AIM Capital, for a period of twelve months. In connection with that agreement the company granted AIM Capital a warrant to purchase 30,000 shares of the company’s common stock at an exercise price per share of $2.69, with a four year vesting period and an expiration date of January 15, 2016. The company received no other consideration from the issuance of the warrants.

Warrant activity for the years ended December 31, 2011 and 2010 was as follows:

				Weighted Average
	Number of			Grant Date
	Warrants			Fair Value
Outstanding, December 31, 2009		562,000		$	0.95
Granted		500,000			3.25
Exercised		(500,000	)		0.70
Expired		(4,000	)		2.98
Unvested, December 31, 2010		558,000		$	3.22
Granted		30,000			1.28
Exercised		-			-
Expired		-			-
Unvested, December 31, 2011		588,000		$	3.12

Stock Based Compensation – American DG Energy

The Company has adopted the 2005 Stock Incentive Plan, or the Plan, under which the board of directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants of the Company.

The maximum number of shares of stock allowable for issuance under the Amended Plan is 5,000,000 shares of common stock, including 1,097,500 shares of restricted stock outstanding as of December 31, 2011. Stock options vest based upon the terms within the individual option grants, usually over a two- or ten-year period with an acceleration of the unvested portion of such options upon a liquidity event, as defined in the Company’s stock option agreement. The options are not transferable except by will or domestic relations order. The option price per share under the Amended Plan is not less than the fair market value of the shares on the date of the grant. The number of securities remaining available for future issuance under the Amended Plan was 761,250 at December 31, 2011.

During the years ended December 31, 2011 and 2010, the Company recognized employee non-cash compensation expense of $667,000 and $228,736, respectively, related to the issuance of stock options and restricted stock. At December 31, 2011, there were no unvested shares of restricted stock outstanding. At December 31, 2011, the total compensation cost related to unvested stock option awards, including EuroSite Power, not yet recognized is $1,212,131. This amount will be recognized over the weighted average period of 3.65 years.

In 2010, the Company granted nonqualified options to purchase 290,000 shares of the common stock to seven employees and two directors at prices ranging between $2.76 and $3.45 per share. Each of those options has a vesting schedule of four years and expires in five years. The fair value of all options issued in 2010 was $359,408, with a weighted average grant date fair value of $1.24 per option.

In 2011, the Company granted nonqualified options to purchase 105,000 shares of the common stock to five employees at prices ranging between $1.12 and $2.01 per share. Those options have a vesting schedule of four years and expire in five years. The fair value of all options issued in 2011 was $68,421, with a weighted average grant date fair value of $0.65 per option.

The weighted average assumptions used in the Black-Scholes option pricing model are as follows:

	2011			2010
Stock options and restricted stock awards
Expected life		5 years			5 years
Risk-free interest rate		1.27	%		1.80	%
Expected volatility		64.50	%		50.97	%

Stock option activity for the years ended December 31, 2011 and 2010 was as follows:

				Exercise		Weighted		Weighted
				Price		Average		Average		Aggregate
	Number of			Per		Exercise		Remaining		Intrinsic
Common Stock Options	Options			Share		Price		Life		Value
Outstanding, December 31, 2009		2,308,000		$	0.07-$2.95	$	0.70		5.94 years	$	5,203,740
Granted		330,000		$	2.76-$3.45		2.96
Exercised		(166,250	)	$	0.07-$1.82		0.33
Canceled		(40,000	)	$	2.89		2.89
Expired		-			-		-
Outstanding, December 31, 2010		2,431,750		$	0.07-$3.45	$	0.99		5.11 years	$	4,379,711
Exercisable, December 31, 2010		1,395,125				$	0.58			$	3,058,719
Vested and expected to vest, December 31, 2010		2,431,750				$	0.99			$	4,379,711
Outstanding, December 31, 2010		2,431,750		$	0.07-$3.45	$	0.99		5.11 years	$	4,379,711
Granted		105,000		$	1.12-$2.01		1.32
Exercised		(423,375	)	$	0.07-$1.82		0.08
Canceled		(100,000	)	$	1.95		1.95
Expired		(5,000	)	$	3.45		3.45
Outstanding, December 31, 2011		2,008,375		$	0.07-$3.45	$	1.15		4.87 years	$	1,055,319
Exercisable, December 31, 2011		1,115,125				$	0.90			$	727,419
Vested and expected to vest, December 31, 2011		2,008,375				$	1.15			$	1,055,319

The aggregate intrinsic value of options outstanding as of December 31, 2011 is calculated as the difference between the exercise price of the underlying options and the price of the Company’s common stock for options that were in-the-money as of that date. Options that were not in-the-money as of that date, and therefore have a negative intrinsic value, have been excluded from this amount.

The Company did not make any restricted stock grants to employees in 2011 or 2010. Restricted stock activity for the years ended December 31, 2011 and 2010 was as follows:

				Weighted
	Number of			Average
	Restricted			Grant Date
	Stock			Fair Value
Unvested, December 31, 2009		440,125		$	0.79
Granted		-			-
Vested		(216,875	)		0.76
Forfeited		(48,000	)		0.70
Unvested, December 31, 2010		175,250		$	0.84
Granted		-			-
Vested		(130,250	)		0.70
Forfeited		(45,000	)		1.26
Unvested, December 31, 2011		-		$	-

Stock-Based Compensation – EuroSite Power

In January 2011, EuroSite Power adopted the 2011 Stock Incentive Plan, or the Plan, under which the Board of Directors may grant up to 3,000,000 shares of incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants of EuroSite Power. On June 13, 2011, the Board of Directors unanimously amended the Plan, to increase the reserved shares of Common Stock issuable under the Plan from 3,000,000 to 4,500,000, or the Amended Plan.

Stock options vest based upon the terms within the individual option grants, usually over a four year period with an acceleration of the unvested portion of such options upon a liquidity event, as defined in EuroSite Power’s stock option agreement. The options are not transferable except by will or domestic relations order. The option price per share under the Amended Plan is not less than the fair value of the shares on the date of the grant. The number of securities remaining available for future issuance under the Amended Plan was 900,000 at December 31, 2011.

On January 15, 2011, EuroSite Power granted nonqualified options to purchase 2,100,000 shares of Common Stock to five employees and two directors at a purchase price of $1.00 per share. Those options have a vesting schedule of four years and expire in ten years. The assumptions used in the Black-Scholes option pricing model include an expected life of 6.25 years, a risk-free interest rate of 2.7% and an expected volatility of 32.8%. The fair value of the options issued was $790,908, with a grant date fair value of $0.38 per option.

On June 13, 2011, EuroSite Power granted nonqualified options to purchase 300,000 shares of Common Stock to three directors at a purchase price of $1.00 per share. Those options have a vesting schedule of four years and expire in ten years. The assumptions used in the Black-Scholes option pricing model include an expected life of 6.25 years, a risk-free interest rate of 2.3% and an expected volatility of 32.4%. The fair value of the options issued was $109,304, with a grant date fair value of $0.36 per option.

On November 3, 2011, EuroSite Power granted its managing director options to purchase 900,000 shares of common stock at purchase price of $1.00 per share and granted to the three members of its advisory board options to purchase 300,000 shares of common stock at purchase price of $1.00 per share. Those options have a vesting schedule of four years and expire in ten years and were made under the UK Sub-Plan to EuroSite Power’s 2011 Stock Incentive Plan. The assumptions used in the Black-Scholes option pricing model include an expected life of 6.25 years, a risk-free interest rate of 1.5% and an expected volatility of 33.1%. The fair value of the options issued was $423,400, with a grant date fair value of $0.35 per option.

At December 31, 2011, EuroSite Power had 3,600,000 options outstanding and recognized employee non-cash compensation expense of $474,695 related to the issuance of those stock options. At December 31, 2011, the total compensation cost related to unvested stock option awards not yet recognized was $848,917. This amount will be recognized over the weighted average period of 3.34 years.

Stock option activity for the years ended December 31, 2011 and 2010 was as follows:

			Exercise		Weighted		Weighted
			Price		Average		Average		Aggregate
	Number of		Per		Exercise		Remaining		Intrinsic
Common Stock Options	Options		Share		Price		Life		Value
Outstanding, December 31, 2010		-		-	$	-		-	$	-
Granted		3,600,000	$	1.00		1.00
Exercised		-		-		-
Canceled		-		-		-
Expired		-		-		-
Outstanding, December 31, 2011		3,600,000	$	1.00	$	1.00		9.34 years	$	-
Exercisable, December 31, 2011		-			$	-			$	-
Vested and expected to vest, December 31, 2011		3,600,000			$	1.00			$	-

The aggregate intrinsic value of options outstanding as of December 31, 2011 is calculated as the difference between the exercise price of the underlying options and the price of EuroSite Power’s Common Stock for options that were in-the-money as of that date. Options that were not in-the-money as of that date, and therefore have a negative intrinsic value, have been excluded from this amount.