American DG Energy Inc. Announces $1.25 Million Registered Direct Offering

WALTHAM, Mass., Dec. 9, 2010 /PRNewswire-FirstCall/ -- American DG Energy Inc. (NYSE Amex: ADGE), a provider of clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, announced today that it has entered into definitive agreements to sell an aggregate of 500,000 shares of its common stock and warrants to purchase an aggregate of 500,000 shares of the Company's common stock in a registered direct offering expected to result in net proceeds of approximately $1 million after deducting placement agency fees and estimated offering expenses.  The warrants will be exercisable at an exercise price of $3.25 per share beginning six months after the date of issuance and will expire five years after they first become exercisable.  Each unit, consisting of one share of common stock and a warrant to purchase one share of common stock, will be sold for a purchase price of $2.50.  The offering is expected to close on or about December 14, 2010, and is subject to customary closing conditions.

American DG Energy intends to use the net proceeds for working capital purposes in connection with the development and installation of current and new energy systems such as cogeneration systems and chillers and for general corporate purposes which may include, among other things, funding acquisitions, although there are no present commitments or agreements with respect to any such transactions.

Canaccord Genuity Inc. is acting as the sole placement agent for the offering.  

A shelf registration statement relating to these securities (File No. 333-167392) previously was filed and declared effective by the Securities and Exchange Commission.  A prospectus supplement relating to the offering will be filed with the Securities and Exchange Commission.  This press release does not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.  A copy of the base prospectus and prospectus supplement (once filed) can be obtained at the Securities and Exchange Commission's website http://www.sec.gov or by sending a request to the offices of Canaccord Genuity Inc., Attn: Syndicate Department, 99 High Street, 12^th Floor, Boston, MA 02110, phone: (800) 225-6201.  

About American DG Energy

American DG Energy supplies low-cost energy to its customers through distributed power generating systems.  The Company is committed to providing institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities – without any capital or start-up costs to the energy user – through its On-Site Utility energy solutions.  American DG Energy is headquartered in Waltham, Massachusetts.  More information can be found at www.americandg.com.

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995

Statements contained herein, which are not historical facts, constitute forward-looking statements and involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, whether or not the Company consummates any additional sales of its common stock in the offering referred to in this press release and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission.  The words "believe", "expect", "anticipate", "may", and similar expressions identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Inquiries to the Company should be directed to Anthony S. Loumidis, Chief Financial Officer, American DG Energy Inc., 45 First Avenue, Waltham, Massachusetts 02451, phone: (781) 622-1117.

SOURCE American DG Energy Inc.