WALTHAM, Mass., May 23, 2011 /PRNewswire/ — American DG Energy Inc. (NYSE Amex: ADGE), a leading OnSite Utility, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, today announced that it has agreed to issue $2,400,000 aggregate principal amount of Senior Unsecured Convertible Debentures (“Debentures”) to John N. Hatsopoulos, the Company’s Chief Executive Officer.

The Debentures will mature on May 25, 2018 and will accrue interest at the rate of 6% per annum payable on a semi-annual basis. At the holder’s option, the Debentures may be converted into shares of common stock of American DG Energy Inc. at a conversion price of $2.20 per share, subject to adjustment in certain circumstances.

The Company has the option to redeem at 115% of Par Value any or all of the Debentures after May 25, 2016. The proceeds of the Debentures will be used in connection with the development and installation of current and new energy systems, business development and for general corporate purposes.

The Debentures will cancel the revolving line of credit agreement with John N. Hatsopoulos, which as of May 23, 2011 had a principal amount outstanding of $2,400,000.

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.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company’s website and in Securities and Exchange Commission filings. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

SOURCE American DG Energy Inc.