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EX-10.2 - MATERIAL AGREEMENT - COMVERGE, INC.exhibit10_2.htm
EX-10.3 - MATERIAL AGREEMENT - COMVERGE, INC.exhibit10_3.htm
EX-10.1 - MATERIAL AGREEMENT - COMVERGE, INC.exhibit10_1.htm
EX-31.1 - SECTION 302 CEO CERTIFICATION - COMVERGE, INC.exhibit31_1.htm
EX-10.5 - EMPLOYMENT AGREEMENT - COMVERGE, INC.exhibit10_5.htm
EX-10.4 - EMPLOYMENT AGREEMENT - COMVERGE, INC.exhibit10_4.htm
EX-32.2 - SECTION 906 CFO CERTIFICATION - COMVERGE, INC.exhibit32_2.htm
EX-31.2 - SECTION 302 CFO CERTIFICATION - COMVERGE, INC.exhibit31_2.htm
EX-32.1 - SECTION 906 CEO CERTIFICATION - COMVERGE, INC.exhibit32_1.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
x
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended June 30, 2010
 
or
 
¨
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from              to             
 
Commission File Number:  001-33399
 
(Exact name of Registrant as specified in its charter)
  
     
Delaware
 
22-3543611
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification No.)
     
     
5390 Triangle Parkway, Suite 300
Norcross, Georgia
 
30092
(Address of principal executive offices)
 
(Zip Code)
 
(678) 392-4954
 (Registrant’s telephone number including area code)
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨       No   ¨
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. (See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act). (Check one):
 
Large accelerated filer    ¨    Accelerated filer   x    Non-accelerated filer   ¨    (Do not check if a smaller reporting company)    Smaller Reporting Company   ¨
 
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   ¨     No   x
 
There were 25,267,835 shares of the Registrant’s common stock, $0.001 par value per share, outstanding on July 23, 2010. 
 


INDEX TO FORM 10-Q
 
         
     
  
Page
Part I - Financial Information
 
     
Item 1.
   
     
   
1
     
   
2
     
   
3
     
   
4
     
Item 2.
 
15
     
Item 3.
 
28
     
Item 4.
 
28
   
Part II - Other Information
  
     
Item 1.
 
29
     
Item 1A.
 
29
     
Item 2.
 
30
     
Item 6.
 
31








CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
   
June 30,
   
December 31,
 
   
2010
   
2009
 
Assets
           
Current assets
           
Cash and cash equivalents
  $ 10,432     $ 16,069  
Restricted cash
    1,584       3,000  
Marketable securities
    24,953       34,409  
Billed accounts receivable, net
    13,544       8,119  
Unbilled accounts receivable
    7,064       11,873  
Inventory, net
    8,167       6,605  
Deferred costs
    6,102       1,715  
Other current assets
    1,484       938  
Total current assets
    73,330       82,728  
                 
Restricted cash
    2,838       2,636  
Property and equipment, net
    19,575       18,340  
Intangible assets, net
    7,352       8,779  
Goodwill
    8,179       8,179  
Other assets
    270       235  
Total assets
  $ 111,544     $ 120,897  
                 
Liabilities and Shareholders' Equity
               
Current liabilities
               
Accounts payable
  $ 8,392     $ 6,874  
Accrued expenses
    6,159       11,574  
Deferred revenue
    19,785       5,890  
Current portion of long-term debt
    3,000       3,000  
Other current liabilities
    6,579       5,648  
Total current liabilities
    43,915       32,986  
                 
Long-term liabilities
               
Deferred revenue
    1,911       1,203  
Long-term debt
    8,250       9,750  
Other liabilities
    2,613       2,914  
Total long-term liabilities
    12,774       13,867  
                 
Shareholders' equity
               
Common stock, $0.001 par value per share, authorized 150,000,000 shares;  issued 25,286,220 and outstanding 25,267,835 shares as of
June 30, 2010 and issued 25,072,764 and outstanding 25,067,102 shares as of December 31, 2009
    25        25   
Additional paid-in capital
    260,153       258,660  
Common stock held in treasury, at cost, 18,385 and 5,662 shares as of June 30, 2010 and December 31, 2009, respectively
    (203 )     (63 )
Accumulated deficit
    (205,128 )     (184,596 )
Accumulated other comprehensive income
    8       18  
Total shareholders' equity
    54,855       74,044  
Total liabilities and shareholders' equity
  $ 111,544     $ 120,897  
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 

 
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
 
 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2010
   
2009
   
2010
   
2009
 
Revenue
                       
Product
  $ 5,294     $ 5,077     $ 10,755     $ 9,913  
Service
    11,753       8,188       19,673       14,932  
Total revenue
    17,047       13,265       30,428       24,845  
Cost of revenue
                               
Product
    4,382       2,982       8,006       6,086  
Service
    7,308       4,445       12,350       8,503  
Total cost of revenue
    11,690       7,427       20,356       14,589  
Gross profit
    5,357       5,838       10,072       10,256  
Operating expenses
                               
General and administrative expenses
    9,214       8,101       17,312       15,990  
Marketing and selling expenses
    4,066       4,683       8,844       8,442  
Research and development expenses
    1,543       1,209       2,908       2,325  
Amortization of intangible assets
    536       552       1,072       1,104  
Operating loss
    (10,002 )     (8,707 )     (20,064 )     (17,605 )
Interest and other expense, net
    291       369       353       564  
Loss before income taxes
    (10,293 )     (9,076 )     (20,417 )     (18,169 )
Provision for income taxes
    55       65       115       107  
Net loss
  $ (10,348 )   $ (9,141 )   $ (20,532 )   $ (18,276 )
                                 
Net loss per share (basic and diluted)
  $ (0.42 )   $ (0.43 )   $ (0.83 )   $ (0.85 )
                                 
Weighted average shares used in computation
    24,618,730       21,403,508       24,598,205       21,385,061  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
   
Six Months Ended June 30,
 
   
2010
   
2009
 
Cash flows from operating activities
           
Net loss
  $ (20,532 )   $ (18,276 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
 
Depreciation
    576       512  
Amortization of intangible assets
    1,412       1,365  
Stock-based compensation
    1,325       2,817  
Other
    501       644  
Changes in operating assets and liabilities:
               
Billed and unbilled accounts receivable, net
    (500 )     9,693  
Inventory, net
    (1,720 )     (340 )
Deferred costs and other assets
    (3,007 )     (991 )
Accounts payable
    1,678       (634 )
Accrued expenses and other liabilities
    (4,580 )     (2,451 )
Deferred revenue
    14,603       17,071  
Net cash (used in) provided by operating activities
    (10,244 )     9,410  
                 
Cash flows from investing activities
               
Changes in restricted cash
    1,214       889  
Purchases of marketable securities
    (9,110 )     (14,481 )
Maturities of marketable securities
    18,165       21,250  
Purchases of property and equipment
    (3,916 )     (8,586 )
Net cash provided by (used in) investing activities
    6,353       (928 )
                 
Cash flows from financing activities
               
Borrowings under debt facility
    18,000       7,218  
Repayment of debt facility
    (19,500 )     (879 )
Payment of subordinated convertible notes
    -       (590 )
Other
    (246 )     3  
Net cash (used in) provided by financing activities
    (1,746 )     5,752  
                 
Net change in cash and cash equivalents
    (5,637 )     14,234  
Cash and cash equivalents at beginning of period
    16,069       19,571  
Cash and cash equivalents at end of period
  $ 10,432     $ 33,805  
                 
Cash paid for interest
  $ 315     $ 707  
Supplemental disclosure of noncash investing and financing activities
         
Recording of asset retirement obligation
  $ (320 )   $ 110  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
 
1.
 
Description of Business and Basis of Presentation
 
Description of Business
 
Comverge, Inc., a Delaware corporation, and its subsidiaries (collectively, the “Company”), provide demand management solutions to electric utilities, grid operators and associated electricity markets in the form of peaking and base load capacity. The Company provides capacity to its customers either through long-term contracts or through open markets in which it actively manages electrical demand or by selling its demand management systems to customers for their operation. The Company has three operating segments: the Utility Products & Services segment, the Residential Business segment, and the Commercial & Industrial Business segment.
 
Basis of Presentation
 
The condensed consolidated financial statements of the Company include the accounts of its subsidiaries. These unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the Company’s financial position as of June 30, 2010 and the results of operations for the three and six months ended June 30, 2010 and 2009, and cash flows for the six months ended June 30, 2010 and 2009, consisting only of normal and recurring adjustments. All significant intercompany transactions have been eliminated in consolidation. Operating results for the three and six months ended June, 2010 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2010. The interim condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the Company’s consolidated financial statements and footnotes thereto for the year ended December 31, 2009 on Form 10-K filed on March 8, 2010.

The condensed consolidated balance sheet as of December 31, 2009 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States.

2.
 
Significant Accounting Policies and Recent Accounting Pronouncements
 
Revenue Recognition – Utility Products & Services
 
The Company sells hardware products and services directly to utilities for use and deployment by the utility. The Company recognizes revenue for such sales when delivery has occurred or services have been rendered and the following criteria have been met: delivery has occurred, the price is fixed and determinable, collection is probable, and persuasive evidence of an arrangement exists.  The Company reports shipping and handling revenue and its associated costs in revenue and cost of revenue, respectively.

The Company has certain contracts which are multiple element arrangements and provide for several deliverables to the customer that may include installation services, marketing services, program management services, right to use software, hardware and hosting services. These contracts require no significant production, modification or customization of the software and the software is incidental to the products and services as a whole. The Company evaluates each deliverable to determine whether it represents a separate unit of accounting. If objective and reliable evidence of fair value exists for all units of accounting in the arrangement, revenue is allocated to each unit of accounting based on relative fair values. Each unit of accounting is then accounted for under the applicable revenue recognition guidance. In situations in which there is objective and reliable evidence of fair value for all undelivered elements but not for delivered elements, the residual method is used to allocate the arrangement’s consideration.
 
 

 Revenue Recognition - Residential Business
 
The Company defers revenue and the associated cost of revenue related to certain long-term Virtual Peaking Capacity, or VPC, contracts until such time as the annual contract payment is fixed and determinable. The Company invoices VPC customers on a monthly or quarterly basis throughout the contract year. The VPC contracts require the Company to provide electric capacity through demand reduction to utility customers, and require a measurement and verification of such capacity on an annual basis in order to determine final contract consideration for a given contract year. Contract years typically begin at the end of a control season (generally, at the end of a utility’s summer cooling season that correlates to the end of the utility’s peak demand for electricity) and continue for twelve months thereafter.  Once a participant enrolls in one of the Company’s VPC programs, the Company installs a digital control unit or thermostat at the participant’s location. The cost of the installation and the hardware are capitalized and depreciated as cost of revenue over the remaining term of the contract with the utility, which is shorter than the operating life of the equipment.  The Company also records telecommunications costs related to the network as cost of revenue.  The cost of revenue is recognized contemporaneously with revenue.
 
The current deferred revenue and deferred cost of revenue as of June 30, 2010 and December 31, 2009 are provided below:  
 
   
June 30,
   
December 31,
 
   
2010
   
2009
 
Deferred revenue:
           
VPC contract related
  $ 14,347     $ 3,443  
Other
    5,438       2,447  
Current deferred revenue
  $ 19,785     $ 5,890  
                 
Deferred cost of revenue:
               
VPC contract related
  $ 3,452     $ 1,072  
Other
    2,650       643  
Current deferred cost of revenue
  $ 6,102     $ 1,715  
 
The Company enters into agreements to provide base load capacity. Energy efficiency revenues are earned based on the Company’s ability to achieve committed capacity through base load reduction. In order to provide capacity, the Company delivers and installs energy efficiency management measures. The base load capacity contracts require the Company to provide electric capacity to utility customers, and include a measurement and verification of such capacity in order to determine contract consideration. The Company defers revenue and associated cost of revenue until such time as the capacity amount, and therefore the related revenue, is fixed and determinable. Once the capacity amount has been verified, the revenue is recognized. If the revenue is subject to penalty, refund or an ongoing obligation, the revenue is deferred until the contingency is resolved and/or the Company has met its performance obligation. Certain contracts contain multiple deliverables, or elements, which require the Company to assess whether the different elements qualify for separate accounting. The separate deliverables in these arrangements meet the separation criteria. Accordingly, revenue is recognized for each element by applying the residual method, since there is objective evidence of fair value of only the undelivered item. The amount allocated to the delivered item is limited to the amount that is not contingent upon delivery of the additional element.
 
 
 
Revenue Recognition - Commercial & Industrial Business
 
The Company enters into agreements to provide commercial and industrial demand response services. The demand response programs require the Company to provide electric capacity through demand reduction when the utility or independent system operator calls a demand response event to curtail electrical usage. Demand response revenues are earned based on the Company’s ability to deliver capacity. In order to provide capacity, the Company manages a portfolio of commercial and industrial participants’ electric loads. Capacity amounts are verified through the results of an actual demand response event or a demand response test.  The Company recognizes revenue and associated cost of revenue in its demand response services at such time as the capacity amount is fixed and determinable.
 
The Company records revenue from capacity programs with independent system operators. The capacity year for its primary capacity program spans from June 1st to May 31st annually. For participation, the Company receives cash payments on a monthly basis in the capacity year. Participation in the capacity program requires the Company to respond to requests from the system operator to curtail energy usage during the mandatory performance period of June through September, which is the peak demand season. The annual payments for a capacity year are recognized at the end of the mandatory performance period, once the revenue is fixed and determinable.
 
Revenue from time-and-materials service contracts and other services are recognized as services are provided. Revenue from certain fixed price contracts are recognized on a percentage-of-completion basis, which involves the use of estimates. If the Company does not have a sufficient basis to measure the progress towards completion, revenue is recognized when the project is completed or when final acceptance is received from the customer. The Company also enters into agreements to provide hosting services that allow customers to monitor and analyze their electrical usage. Revenue from hosting contracts is recognized as the services are provided, generally on a recurring monthly basis.

Comprehensive Loss
 
The Company reports total changes in equity resulting from revenues, expenses, and gains and losses, including those that do not affect the accumulated deficit. Accordingly, other comprehensive loss includes those amounts relating to unrealized gains and losses on investment securities classified as available for sale.
 
The components of comprehensive loss are as follows:
 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2010
   
2009
   
2010
   
2009
 
                         
Net loss
  $ (10,348 )   $ (9,141 )   $ (20,532 )   $ (18,276 )
Unrealized gain (loss) on marketable securities
    (1 )     30       (10 )     19  
Comprehensive loss
  $ (10,349 )   $ (9,111 )   $ (20,542 )   $ (18,257 )

Concentration of Credit Risk
 
The Company derives a significant portion of its revenue from products and services that it supplies to electricity providers, such as utilities and independent service operators. Changes in economic conditions and unforeseen events could occur and could have the effect of reducing use of electricity by our customers’ consumers. The Company’s business success depends in part on its relationships with a limited number of large customers.  During the three and six months ended June 30, 2010, the Company had one customer which accounted for 24% and 21%, respectively, of the Company’s revenue. The total accounts receivable from this customer was $4,116 as of June 30, 2010, or 20% of net accounts receivable outstanding. During the three and six months ended June 30, 2009, the Company had one customer which accounted for 16% of the Company’s revenue during both periods.  No other customer accounted for more than 10% of the Company’s total revenue during the three and six months ended June 30, 2010 and 2009.
 
The Company is subject to concentrations of credit risk from its cash and cash equivalents and short term investments. The Company limits its exposure to credit risk associated with cash and cash equivalents and short term investments by placing its cash and cash equivalents with a number of domestic financial institutions and by investing in investment grade securities.
 
 
 
Goodwill
 
The Company performs its annual impairment test of goodwill as of December 31st. Goodwill is tested for impairment using the two-step approach. Step 1 of the goodwill impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill.  The Company bases its fair value estimates on projected financial information which it believes to be reasonable.  If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test would be performed to measure the amount of impairment, if any. As of June 30, 2010, the goodwill balance of $7,680 is related to the Energy Efficiency reporting unit in the Residential Business segment.
 
This reporting unit is experiencing a decline in installations in its service territories, resulting in revenue from the reporting unit being less than expected.  As of June 30, 2010, the Company does not believe an event or change in circumstance has occurred that would more likely than not reduce the fair value of the reporting unit below its carrying amount.  If the decline in revenue and associated cash flows continues, it may impact the fair value of the reporting unit, causing its carrying value to exceed its fair value.  Also, materially different assumptions regarding future performance of the reporting unit or a change in the strategic direction of the reporting unit could result in significant impairment losses.
 
Recent Accounting Pronouncements
 
In October 2009, the Financial Accounting Standards Board, or FASB, issued amendments to the accounting and disclosure for revenue recognition. These amendments, effective for fiscal years beginning on or after June 15, 2010 (early adoption is permitted), modify the criteria for recognizing revenue in multiple element arrangements and the scope of what constitutes a non-software deliverable. The Company is currently assessing the impact of the adoption on its consolidated financial position and results of operations.
 
In January 2010, the FASB issued Accounting Standards Update, or ASU, No. 2010-06 Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements.  The guidance requires previous fair value hierarchy disclosures to be further disaggregated by class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. In addition, significant transfers between Levels 1 and 2 of the fair value hierarchy are required to be disclosed. These additional requirements became effective January 1, 2010 for quarterly and annual reporting. These amendments did not have an impact on the consolidated financial results as this guidance relates only to additional disclosures.
 
In February 2010, the FASB issued ASU No. 2010-09 Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements.  The update removes the requirement to disclose a date through which subsequent events have been evaluated.   The update is effective for interim or annual periods ending after June 15, 2010.  The change in disclosure did not have a material impact on the Company’s financial position, results of operation or cash flows.
 

3.
 
Net Loss Per Share
 
Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding and, when dilutive, potential common shares from options and warrants using the treasury stock method and from convertible securities using the if-converted method. Because the Company reported a net loss for the three and six months ended June 30, 2010 and 2009, all potential common shares have been excluded from the computation of the dilutive net loss per share for all periods presented because the effect would have been anti-dilutive. Such potential common shares consist of the following:
 
   
Six Months Ended June 30,
   
2010
 
2009
Unvested restricted stock awards
 
            559,179
 
            652,890
Outstanding options
 
         2,489,984
 
         2,313,153
Total
 
3,049,163
 
2,966,043
 
 
 

4.
 
Marketable Securities
 
The amortized cost and fair value of marketable securities, with gross unrealized gains and losses, as well as the balance sheet classification as of June 30, 2010 and December 31, 2009 is presented below.

   
June 30, 2010
 
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
   
Cash and
   
Restricted
   
Marketable
 
   
Cost
   
Gains
   
Losses
   
Value
   
Equivalents
   
Cash
   
Securities
 
Money market funds
  $ 13,811     $ -     $ -     $ 13,811     $ 7,480     $ 4,331     $ 2,000  
Commercial paper
    1,400       -       -       1,400       -       -       1,400  
Corporate debentures/bonds
    21,545       23       (15 )     21,553       -       -       21,553  
Total marketable securities
    36,756       23       (15 )     36,764       7,480       4,331       24,953  
Cash in operating accounts
    3,043       -       -       3,043       2,952       91       -  
Total
  $ 39,799     $ 23     $ (15 )   $ 39,807     $ 10,432     $ 4,422     $ 24,953  
 
   
December 31, 2009
 
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
   
Cash and
   
Restricted
   
Marketable
 
   
Cost
   
Gains
   
Losses
   
Value
   
Equivalents
   
Cash
   
Securities
 
Money market funds
  $ 15,622     $ -     $ -     $ 15,622     $ 10,406     $ 2,216     $ 3,000  
Commercial paper
    6,142       -       -       6,142       -       -       6,142  
Corporate debentures/bonds
    26,249       45       (27 )     26,267       1,000       -       25,267  
Total marketable securities
    48,013       45       (27 )     48,031       11,406       2,216       34,409  
Cash in operating accounts
    8,083       -       -       8,083       4,663       3,420       -  
Total
  $ 56,096     $ 45     $ (27 )   $ 56,114     $ 16,069     $ 5,636     $ 34,409  

Realized gains and losses to date have not been material. Interest income for the three and six months ended June 30, 2010 was $249 and $510, respectively.  Interest income for the three and six months ended June 30, 2009 was $141 and $350, respectively.

The Company applies a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories:
 
 
·
Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.
 
 
·
Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.
 
 
·
Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s estimates of assumptions market participants would use in pricing the asset or liability.

The Company’s assets that are measured at fair value on a recurring basis are generally classified within Level 1 or Level 2 of the fair value hierarchy. The types of instruments valued based on quoted market prices in active markets include most money market securities, U.S. Treasury securities and equity investments. Such instruments are generally classified within Level 1 of the fair value hierarchy. The Company invests in money market funds that are traded daily and does not adjust the quoted price for such instruments.

The types of instruments valued based on quoted prices in less active markets, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include the Company’s U.S. Agency securities, Commercial Paper, U.S. Corporate Bonds and certificates of deposit. Such instruments are generally classified within Level 2 of the fair value hierarchy. The Company uses consensus pricing, which is based on multiple pricing sources, to value its fixed income investments.
 

The table below presents marketable securities, grouped by fair value levels, as of June 30, 2010 and December 31, 2009.
 
         
Fair Value Measurements at Reporting Date Using
 
         
Quoted Prices in Active
   
Significant Other
   
Significant
 
         
Markets for Identical
   
Observable
   
Unobservable
 
   
June 30,
   
Assets
   
Inputs
   
Inputs
 
   
2010
   
(Level 1)
   
(Level 2)
   
(Level 3)
 
Money market funds
  $ 13,811     $ 11,811     $ 2,000     $ -  
Commercial paper
    1,400       -       1,400       -  
Corporate debentures/bonds
    21,553       -       21,553       -  
Total
  $ 36,764     $ 11,811     $ 24,953     $ -  
 
         
Fair Value Measurements at Reporting Date Using
 
         
Quoted Prices in Active
   
Significant Other
   
Significant
 
         
Markets for Identical
   
Observable
   
Unobservable
 
   
December 31,
   
Assets
   
Inputs
   
Inputs
 
   
2009
   
(Level 1)
   
(Level 2)
   
(Level 3)
 
Money market funds
  $ 15,622     $ 12,622     $ 3,000     $ -  
Commercial paper
    6,142       -       6,142       -  
Corporate debentures/bonds
    26,267       -       26,267       -  
Total
  $ 48,031     $ 12,622     $ 35,409     $ -  

5.
 
Long-Term Debt

On February 5, 2010, Comverge, Inc. and its wholly owned subsidiaries Enerwise Global Technologies, Inc, Comverge Giants, LLC, Public Energy Solutions, LLC, Public Energy Solutions NY, LLC, Clean Power Markets, Inc., and Alternative Energy Resources, Inc., entered into a second amendment to its existing credit and term loan facility with Silicon Valley Bank. The second amendment increased the revolver loan by an additional $20,000 bringing the total revolver loan to $30,000 for borrowings to fund general working capital and other corporate purposes and issuances of letters of credit.  The second amendment also added Alternative Energy Resources, Inc., a wholly owned subsidiary of Comverge, as a borrower and extended the term of the facility by one year to December 2012.  In connection with the extension of the term of the credit facility, a commitment fee of $100 was paid on February 5, 2010, and additional commitment fees of $75 are payable on each of February 5, 2011 and February 5, 2012.  As of June 30, 2010, the Company had $18,145 of outstanding letters of credit and $11,855 of borrowing availability from the revolver loan.
 
 
 
The interest on revolving loans under the amended facility accrues at either (a) a rate per annum equal to the greater of the Prime Rate or 4% plus the Prime Rate Advance Margin, or (b) a rate per annum equal to the LIBOR Advance Rate plus the LIBOR Rate Advance Margin, as such terms are defined in the amended facility agreement.  The second amendment also sets forth certain financial ratios to be maintained by the borrowers on a consolidated basis.  The obligations under the amended facility are secured by all assets of Comverge and its other borrower subsidiaries, including Alternative Energy Resources, Inc. All other terms and conditions of the credit facility remain the same and in full force and effect.
 
Long-term debt as of June 30, 2010 and December 31, 2009 consisted of the following:
 
   
June 30,
   
December 31,
 
   
2010
   
2009
 
Security and loan agreement with a U.S. bank, collateralized by substantially all of the Company's
assets, maturing in December 2012, interest payable at a variable rate (3.35% and 3.28% as of
June 30, 2010 and December 31, 2009)
  $ 11,250     $ 12,750  
Total debt
    11,250       12,750  
Less: Current portion of long-term debt
    (3,000 )     (3,000 )
Total long-term debt
  $ 8,250     $ 9,750  
 

6.
 
Stock-Based Compensation
 
The Company’s Amended and Restated 2006 Long-Term Incentive Plan  (“2006 LTIP”) was approved by the Company’s shareholders in May 2010 and provides for the granting of stock-based incentive awards to eligible Company employees and directors and to other non-employee service providers, including options to purchase the Company’s common stock and restricted stock awards at not less than the fair value of the Company’s common stock on the grant date and for a term of not greater than seven years. Awards are granted with service vesting requirements, performance vesting conditions, market vesting conditions, or a combination thereof. Subject to adjustment as defined in the 2006 LTIP, the aggregate number of shares available for issuance is 7,556,036. Stock-based incentive awards expire between five and ten years from the date of grant and generally vest over a one to four-year period from the date of grant.  As of June 30, 2010, 2,126,326 shares were available for grant under the 2006 LTIP. The expense related to stock-based incentive awards recognized for the three and six months ended June 30, 2010 was $843 and $1,325, respectively.  The expense related to stock-based incentive awards recognized for the three and six months ended June 30, 2009 was $1,430 and $2,817, respectively.
 
A summary of the Company’s stock option activity for the six months ended June 30, 2010 is presented below:
 
   
June 30, 2010
 
         
Weighted
       
   
Number of
   
Average
       
   
Options
   
Exercise
   
Range of
 
   
(in Shares)
   
Price
   
Exercise Prices
 
Outstanding at beginning of period
    1,988,400     $ 12.63       $0.58 to $34.23  
Granted
    829,793       10.02       $8.70 to $11.52  
Exercised
    (106,856 )     1.58       $0.58 to $7.56  
Cancelled
    (78,000 )     22.31       $10.34 to $34.23  
Forfeited
    (143,353 )     7.64       $3.76 to $18.00  
Outstanding at end of period
    2,489,984     $ 12.22       $0.58 to $34.23  
Exercisable at end of period
    1,364,627     $ 14.45       $0.58 to $34.23  
 
 
 

     
Outstanding as of June 30, 2010
   
Exercisable as of June 30, 2010
 
                 
Weighted
               
Weighted
 
           
Average
   
Average
         
Average
   
Average
 
           
Remaining
   
Exercise
         
Remaining
   
Exercise
 
     
Number
   
Contractual
   
Price per
   
Number
   
Contractual
   
Price per
 
Exercise Prices
   
Outstanding
   
Life
   
Share
   
Exercisable
   
Life
   
Share
 
     
(In Shares)
   
(In Years)
         
(In Shares)
   
(In Years)
       
  $0.58 - $0.82       204,431       1.7     $ 0.73       204,431       1.7     $ 0.74  
  $2.40 - $3.99       33,191       1.7       2.89       33,191       1.7       2.89  
  $4.00 - $7.99       275,224       5.1       4.47       114,338       4.3       4.33  
  $8.00-$10.33       708,919       6.4       9.81       83,362       5.1       9.57  
  $10.34 - $14.09       591,287       5.1       11.59       257,909       3.5       12.18  
  $14.10 - $17.99       11,250       0.9       14.10       11,250       0.9       14.10  
  $18.00 - $23.53       453,121       3.3       18.08       447,586       3.3       18.08  
  $23.54       15,547       3.7       23.54       15,547       3.7       23.54  
  $23.55 - $36.00       197,014       3.6       32.59       197,013       3.6       32.59  
          2,489,984       4.7     $ 12.22       1,364,627       3.3     $ 14.45  
 
For awards with performance and/or service conditions only, the Company utilized the Black-Scholes option pricing model to estimate fair value of options issued, with the following assumptions (weighted averages based on grants during the period):

   
Six Months Ended June 30,
 
   
2010
 
2009
 
Risk-free interest rate
 
2.12
%
1.85
%
Expected term of options, in years
 
4.6
 
4.6
 
Expected annual volatility
 
70
%
70
%
Expected dividend yield
 
0
%
0
%

The weighted average grant-date fair value of options granted during the six months ended June 30, 2010 and 2009 was $5.68 and $3.13, respectively.

A summary of the Company’s restricted stock award activity for the six months ended June 30, 2010 is presented below:

   
June 30, 2010
 
         
Weighted
 
         
Average
 
         
Grant Date
 
   
Number of
   
Fair Value
 
   
Shares
   
Per Share
 
Unvested at beginning of period
    496,589     $ 9.28  
Granted
    206,260       10.37  
Vested
    (44,010 )     14.61  
Cancelled
    -    
NA
 
Forfeited
    (99,660 )     8.64  
Unvested at end of period
    559,179     $ 9.38  
 
 
 
 
7.
 
Segment Information
 
As of June 30, 2010, the Company had three reportable segments: the Utility Products & Services segment, the Residential Business segment, and the Commercial & Industrial Business segment. The Utility Products & Services segment sells hardware, software and services, such as installation and/or marketing, to utilities that elect to own and operate demand management networks for their own benefit. The Residential Business segment sells electric capacity to utilities under long-term contracts, either through demand response or energy efficiency, primarily through marketing and installing our devices on residential and small commercial end-use participants.  The Commercial & Industrial Business segment provides demand response and energy management services that enable commercial and industrial customers to reduce energy consumption and total costs and make informed decisions on energy and renewable energy purchases and programs.
 
Management has three primary measures of segment performance: revenue, gross profit and operating income. Substantially all of our revenues are generated with domestic customers. The Utility Products & Services segment product and service cost of revenue includes materials, labor and overhead. Within the Residential Business segment, cost of revenue is based on operating costs of the demand response networks, primarily telecommunications costs related to the network and depreciation of the assets capitalized in building the demand response network, and build-out costs of the base load energy efficiency networks, primarily lighting costs and installation services related to energy efficiency upgrades. The Commercial & Industrial Business segment’s cost of revenue includes participant payments for the demand response services as well as materials, labor and overhead for the energy management services. Operating expenses directly associated with each operating segment include sales, marketing, product development, amortization of intangible assets and certain administrative expenses. 
 
The Company does not allocate assets and liabilities to its operating segments. Operating expenses not directly associated with an operating segment are classified as “Corporate Unallocated Costs.” Corporate Unallocated Costs include support group compensation, travel, professional fees and marketing activities.
 
The following tables show operating results for each of the Company’s operating segments:
 
 
 
 
 
 
 
 
 
 
 
 
   
Three Months Ended June 30, 2010
 
   
Utility
         
Commercial
             
   
Products
         
&
   
Corporate
       
   
&
   
Residential
   
Industrial
   
Unallocated
       
   
Services
   
Business
   
Business
   
Costs
   
Total
 
Revenue
                             
Product
  $ 5,294     $ -     $ -     $ -     $ 5,294  
Service
    5,812       2,269       3,672       -       11,753  
Total revenue
    11,106       2,269       3,672       -       17,047  
Cost of revenue
                                       
Product
    4,382       -       -       -       4,382  
Service
    3,734       1,265       2,309       -       7,308  
Total cost of revenue
    8,116       1,265       2,309       -       11,690  
Gross profit
    2,990       1,004       1,363       -       5,357  
Operating expenses
                                       
General and administrative expenses
    2,272       2,238       842       3,862       9,214  
Marketing and selling expenses
    582       1,389       1,416       679       4,066  
Research and development expenses
    1,543       -       -       -       1,543  
Amortization of intangible assets
    -       299       233       4       536  
Operating loss
    (1,407 )     (2,922 )     (1,128 )     (4,545 )     (10,002 )
Interest and other expense (income), net
    3       1       (1 )     288       291  
Loss before income taxes
  $ (1,410 )   $ (2,923 )   $ (1,127 )   $ (4,833 )   $ (10,293 )

   
Three Months Ended June 30, 2009
 
   
Utility
         
Commercial
             
   
Products
         
&
   
Corporate
       
   
&
   
Residential
   
Industrial
   
Unallocated
       
   
Services
   
Business
   
Business
   
Costs
   
Total
 
Revenue
                             
Product
  $ 5,077     $ -     $ -     $ -     $ 5,077  
Service
    2,862       3,019       2,307          -       8,188  
Total revenue
    7,939       3,019       2,307       -       13,265  
Cost of revenue
                                       
Product
    2,982       -       -       -       2,982  
Service
    1,380       1,690       1,375       -       4,445  
Total cost of revenue
    4,362       1,690       1,375       -       7,427  
Gross profit
    3,577       1,329       932       -       5,838  
Operating expenses
                                       
General and administrative expenses
    1,369       2,500       773       3,459       8,101  
Marketing and selling expenses
    775       1,943       1,027       938       4,683  
Research and development expenses
    1,209       -       -       -       1,209  
Amortization of intangible assets
    -       314       233       5       552  
Operating income (loss)
    224       (3,428 )     (1,101 )     (4,402 )     (8,707 )
Interest and other expense, net
    5       225       3       136       369  
Income (loss) before income taxes
  $ 219     $ (3,653 )   $ (1,104 )   $ (4,538 )   $ (9,076 )


 

 
   
Six Months Ended June 30, 2010
 
   
Utility
         
Commercial
             
   
Products
         
&
   
Corporate
       
   
&
   
Residential
   
Industrial
   
Unallocated
       
   
Services
   
Business
   
Business
   
Costs
   
Total
 
Revenue
                             
Product
  $ 10,755     $ -     $ -     $ -     $ 10,755  
Service
    9,431       4,368       5,874       -       19,673  
Total revenue
    20,186       4,368       5,874       -       30,428  
Cost of revenue
                                       
Product
    8,006       -       -       -       8,006  
Service
    6,102       2,604       3,644       -       12,350  
Total cost of revenue
    14,108       2,604       3,644       -       20,356  
Gross profit
    6,078       1,764       2,230       -       10,072  
Operating expenses
                                       
General and administrative expenses
    4,032       4,779       1,618       6,883       17,312  
Marketing and selling expenses
    1,358       3,140       2,907       1,439       8,844  
Research and development expenses
    2,908       -       -       -       2,908  
Amortization of intangible assets
    -       598       466       8       1,072  
Operating loss
    (2,220 )     (6,753 )     (2,761 )     (8,330 )     (20,064 )
Interest and other expense (income), net
    6       1       (7 )     353       353  
Loss before income taxes
  $ (2,226 )   $ (6,754 )   $ (2,754 )   $ (8,683 )   $ (20,417 )

   
Six Months Ended June 30, 2009
 
   
Utility
         
Commercial
             
   
Products
         
&
   
Corporate
       
   
&
   
Residential
   
Industrial
   
Unallocated
       
   
Services
   
Business
   
Business
   
Costs
   
Total
 
Revenue
                             
Product
  $ 9,913     $ -     $ -     $ -     $ 9,913  
Service
    4,687       6,971       3,274       -       14,932  
Total revenue
    14,600       6,971       3,274       -       24,845  
Cost of revenue
                                       
Product
    6,086       -       -       -       6,086  
Service
    2,153       4,333       2,017       -       8,503  
Total cost of revenue
    8,239       4,333       2,017       -       14,589  
Gross profit
    6,361       2,638       1,257       -       10,256  
Operating expenses
                                       
General and administrative expenses
    2,446       5,076       1,600       6,868       15,990  
Marketing and selling expenses
    1,614       3,156       1,876       1,796       8,442  
Research and development expenses
    2,325       -       -       -       2,325  
Amortization of intangible assets
    -       629       466       9       1,104  
Operating loss
    (24 )     (6,223 )     (2,685 )     (8,673 )     (17,605 )
Interest and other expense, net
    9       436       3       116       564  
Loss before income taxes
  $ (33 )   $ (6,659 )   $ (2,688 )   $ (8,789 )   $ (18,169 )

 






 
Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and the documents incorporated into this Quarterly Report on Form 10-Q by reference contain forward-looking statements. These forward-looking statements include statements with respect to our financial condition, results of operations and business. The words “assumes,” “believes,” “expects,” “budgets,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends” or similar terminology identify forward-looking statements. These forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized, cause actual results to differ materially from our forward-looking statements and/or otherwise materially affect our financial condition, results of operations and cash flows. Please see the section below entitled “Risk Factors,” the section entitled “Risk Factors” in our Annual Report on Form 10-K (File No. 001-33399) filed with the Securities and Exchange Commission, or SEC, on March 8, 2010, and elsewhere in this filing for a discussion of examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should carefully review the risks described herein and in other documents we file from time to time with the SEC, including the other Quarterly Reports on Form 10-Q filed and to be filed in 2010. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date hereof. Except as provided by law, we undertake no obligation to update any forward-looking statement based on changing circumstances or otherwise.
 
You should read the following discussion together with management’s discussion and analysis, financial statements and the notes thereto included in our Annual Report on Form 10-K filed with the SEC on March 8, 2010 and the financials statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
 
Overview
 
We are an intelligent energy management company providing technologically advanced demand management solutions and load capacity which improve the evolving Smart Grid.  We provide our solutions to electric utilities, grid operators and associated electricity markets.  As an alternative to the traditional method of providing capacity by building a new power plant, we deliver our solutions through demand management products, services and systems that decrease energy consumption.  Our demand management solutions utilize state-of-the-art advancements in hardware, software, and services—the solutions are designed, built and operated for the benefit of our customers, which serve residential, commercial and industrial consumers.  We provide capacity to our customers either through long-term contracts or through open markets where we actively manage electrical demand or by selling demand management solutions to customers for their operation.  The capacity we deliver is more environmentally friendly and less expensive than conventional alternatives and has the benefit of increasing overall system reliability.
 
We provide our intelligent energy management solutions through our three reporting segments: the Utility Products & Services segment, the Residential Business segment, and the Commercial & Industrial, or C&I, Business segment.  The Utility Products & Services segment sells solutions comprising hardware, our Apollo software and services, such as installation, marketing, IT integration and project management, to utilities that elect to own and operate demand management networks for their own benefit.  The Residential Business segment sells electric capacity to utilities under long-term contracts, either through demand response or energy efficiency, primarily through marketing and installing our devices on residential and small commercial end-use participants.  The C&I Business segment provides demand response and energy management services to utilities and associated electricity markets that enable commercial and industrial customers to reduce energy consumption and total costs and make informed decisions on energy and renewable energy purchases and programs.  

 
 
As of June 30, 2010, we owned or managed 3,355 megawatts, an increase of 456 megawatts or 16% from December 31, 2009.  We include megawatts as owned or managed if there is a contract in place that requires us to either provide capacity to the utility or open market; provide a turnkey program to a utility; or manage megawatts for a fee.  The table below summarizes the megawatts we own or manage by segment.
 
 
As of  June 30, 2010
         
Commercial &
   
 
Utility Products
 
Residential
 
Industrial
 
Total
 
& Services
 
Business
 
Business
 
Comverge
Megawatts owned/managed under capacity contracts
                          -
 
                    640
 
                       270
 
                910
Megawatts owned for sale in open market programs
                          -
 
                      10
 
                    1,443
 
             1,453
Megawatts managed under turnkey contracts
                        555
 
                       -
 
                         -
 
                555
Megawatts managed for a fee on a pay-for-performance basis
                          -
 
                       -
 
                       437
 
                437
Megawatts owned or managed
                        555
 
                    650
 
                    2,150
 
             3,355
 
The table below presents the activity in megawatts owned or managed during the six months ended June 30, 2010.
 
 
Megawatts
 
Owned or Managed
As of December 31, 2009
                                   2,899
Capacity contracts
12
Open market programs
259
Turnkey contracts
185
As of June 30, 2010
                                   3,355
 
Megawatts owned/ managed under capacity contracts
 
As of June 30, 2010, we owned or managed 910 megawatts of contracted capacity from VPC and energy efficiency contracts, an increase of 12 megawatts from December 31, 2009. Our existing VPC contracts represented contracted capacity of 817 megawatts and our energy efficiency contracts represented contracted capacity of 93 megawatts.
 
Cumulatively, we have installed capacity of 548 megawatts under our VPC and energy efficiency capacity contracts as of June 30, 2010 compared to 462 megawatts as of December 31, 2009, an increase of 86 megawatts. The main components of the change are an increase of 84 megawatts installed during the six months ended June 30, 2010 in our existing VPC programs and an increase of 2 megawatts from the energy efficiency program during the six months ended June 30, 2010. The table below presents contracted, installed and available capacity as of June 30, 2010 and December 31, 2009, respectively.

(Megawatts)
June 30, 2010
 
December 31, 2009
Contracted capacity
910
 
898
Installed capacity (1)
548
 
462
Available capacity (2)
506
 
421

 
(1)
For residential VPC programs, installed capacity generally refers to the number of devices installed multiplied by the historically highest demonstrated available capacity provided per device for the applicable service territory.  For C&I VPC programs, installed capacity generally refers to the megawatts that our participants have committed to shed.
 
(2)  
Available capacity represents the amount of electric capacity that we have made available to our customers during each contract year based on the results of our measurement and verification process. For residential VPC programs, we have used the most recently settled measurement and verification results to present available capacity for each period, which is typically measured during the fourth quarter of each year.  For C&I VPC programs, we have assumed that our participants will shed the committed capacity as included in installed capacity.

 
 
Megawatts owned for sale in open markets
 
As of June 30, 2010, we had 1,453 megawatts enrolled in open market programs, an increase of 259 megawatts from December 31, 2009.  We consider capacity enrolled when a participant has agreed to shed a committed capacity in an open market program in which we participate.

Megawatts managed under turnkey contracts
 
As of June 30, 2010, we managed 555 megawatts under turnkey contracts, an increase of 185 megawatts from December 31, 2009. The increase of 185 megawatts consists of 40 megawatts from an expansion of our program with Pepco Holdings, Inc. in January 2010 and 145 megawatts from our executed agreement with PECO.  Under both agreements, we will provide a full turnkey program, including hardware, installation, marketing and call center services.  We calculate megawatts managed under turnkey contracts by using a pre-determined factor of anticipated load reduction for each unit deployed, in relation to the type of end-use participant, whether residential or commercial and industrial, and our customer’s service territory.

Recent Developments

In April 2010, we committed pre-auction cash collateral of approximately $18.0 million in advance of the 2013-2014 Reliability Pricing Model Base Residual Auction conducted by PJM Interconnection in May 2010.  The amount was funded with borrowings under our $30.0 million revolver loan with Silicon Valley Bank.  PJM awarded a total of 9,282 megawatts to demand response resources in the 2013-2014 Reliability Pricing Model Base Residual Auction, an increase of 32% from the previous year.  We were awarded 997 megawatts, an increase in our market share to more than 10% of the total awarded demand response resources in the 2013-2014 auction. After the auction was completed, we were refunded our pre-auction cash collateral and repaid the $18.0 million of borrowings under the revolver loan, replacing our cash collateral with a letter of credit for $7.9 million.
 
In June 2010, the Company entered into a joint venture master agreement with Projects International, Inc., or PI, to form a strategic alliance arrangement under which the parties will identify and jointly pursue opportunities for demand response, smart grid and energy efficiency projects in certain countries or country groups.  
 
In early July 2010, we delivered more than 250 megawatts of reduced electricity demand in response to the heat wave that gripped the Eastern United States. With grid instability threatening all or parts of 13 eastern states, several local grid operators and utilities, including PJM Interconnection, leveraged our intelligent energy management solutions to reduce strain on the grid by executing mandatory curtailment programs.
 
In July 2010, we were selected by Public Service Company of Oklahoma (PSO) to deliver a comprehensive energy management pilot program to eligible residential and commercial customers. The demand response pilot program will be built on our Apollo Demand Response Management System (DRMS) software. Under the three-year agreement, we will provide full turnkey services to both PSO’s residential and commercial and industrial customers.
 
We currently plan to centralize our business support operations in our Norcross, Georgia headquarters to establish a more unified culture and to run our business more efficiently.  To that end, we will be relocating several key employees from our East Hanover, New Jersey; Kennett Square, Pennsylvania; and Newark, California offices to Norcross and hiring others here locally. This impacts approximately 40-50 positions, in total. We estimate the one-time costs for relocation, hiring, knowledge transfer and leased office closures to be approximately $3.5 million to be incurred in the second half of 2010, with the majority occurring in the fourth quarter.
 
New Executive Officers
 
On June 2, 2010, Chris Camino joined Comverge as Executive Vice President of Sales and Chief Marketing Officer.  Mr. Camino brings more than 20 years of experience to his role overseeing sales and go-to-market strategies for Comverge.  Mr. Camino has spent the past seven years with SAP in its utilities and telecommunications divisions.  Prior to SAP, Mr. Camino held a variety of senior-level sales positions in the technology and medical sales sectors.
 
On July 1, 2010, Steve Moffitt joined Comverge as Executive Vice President of Engineering and Operations.  Mr. Moffitt joined Comverge with more than 20 years experience in the energy, utility and commodity trading business. In his new role, Mr. Moffitt will oversee the company's day-to-day operations and lead our engineering teams responsible for developing intelligent energy management solutions. He was previously with BG Group, UBS Investment Bank and Dynegy, Inc. and held numerous executive positions.  Mr. Moffitt’s career includes significant experience in information technology, utility transmission, distribution, and generation operations.