HydroGen develops multi-megawatt hydrogen-powered phosphoric acid fuel cell (PAFC) systems utilizing technology acquired from Westinghouse Corporation and targets markets for power stations of over two megawatts. Fuel cells are a proven technology with important advantages relative to fossil fuel-based electricity generators: they are combustionless, emissions-free, quiet, energy efficient and have few moving parts. HydroGen Corporation reported third quarter demonstration grant revenue of $481,884 and a net loss of $3.5 million or $0.27 per share. Since HydroGen is a development-stage company transitioning to commercialization of its technology, we do not believe that current results reflect the Company’s long-term potential. On November 13, 2007, HydroGen named John Freeh as CEO. We have been impressed with the progress that Mr. Freeh has made in the relatively short period of time since he was named CEO as reflected in an update letter to shareholders issued December 14 that highlighted the Company’s progress in module production, technology development, business development and financial planning. We reiterate our Speculative Buy rating on HydroGen’s shares, which we consider appropriate for aggressive investors willing to accept the above-average risk inherent in an early-stage company that is not yet profitable.
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