.
美國
證券交易委員會
華盛頓特區20549
表格
（標記一）
根據1934年證券交易法第13或15(d)條規定的季度報告 |
截至2022年1月31日的季度期
或者
根據1934年證券交易法第13或15(d)條規定的過渡報告 |
在過渡期從 到
委託文件編號：001-39866
(根據其章程規定的註冊人準確名稱)
（註冊或組織的）提起訴訟的州或其他司法管轄區（如適用） | （IRS僱主 | |
組建國的駐地 | （標識號碼） |
（總部地點，包括郵政編碼）
(
(註冊人電話號碼，包括區號)
在法案第12(b)條的規定下注冊的證券：
每種類別的證券 |
| 交易標誌 |
| 名稱爲每個註冊的交易所: |
| 股市 |
請勾選以下項目：（1）報名者是否在過去12個月（或報名者要求提交這些報告的較短期間內）已提交應按1934年證券交易法第13條或第15(d)條提交的所有報告；及（2）報名者是否在過去90天內一直有該項提交要求。
勾選本段文字標誌着註冊者在過去的12個月內每個交互式數據文件均已按照規則405條和監管S-T(本章節232.405條)提交，並將在未來提交交互式數據文件。
按照復權法規第120億點2條的定義，請用勾號標明註冊人是大型高速審核科技公司，高速審核科技公司，非高速審核科技公司，小型報告公司，或新興增長公司。
如果是新興增長公司，請勾選是否註冊人選擇不使用執行交易所第13（a）條規定所提供的任何新的或修訂的財務會計準則的推遲過渡期。 ☐☐ | 非加速歸檔企業☐ | 較小的報告公司 | 新興成長公司 |
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐
股票，每股面值0.0001美元
截至2024年11月7日，每股面值爲$0.01的普通股數量爲
2
第一部分。基本報表
項目1 — 中期基本報表（未經審計）
普拉格能源公司及其子公司
簡明合併資產負債表s
(以千爲單位，除每股金額和每股股數外)
(未經審計)
| 九月三十日， |
| 12月31日 | |||
| 2024 |
| 2023 | |||
資產 | ||||||
流動資產： | ||||||
現金及現金等價物 | $ | | $ | | ||
限制性現金 | | | ||||
應收賬款淨額爲 |
| |
| | ||
114,467 |
| |
| | ||
合同資產 | | | ||||
預付費用和其他流動資產 |
| |
| | ||
總流動資產 |
| |
| | ||
限制性現金 |
| |
| | ||
固定資產淨額 | |
| | |||
Right of use assets related to finance leases, net | | | ||||
與經營租賃相關的使用權資產，淨額 | | | ||||
Equipment related to power purchase agreements and fuel delivered to customers, net | |
| | |||
合同資產 | | | ||||
無形資產，淨值 |
| |
| | ||
對非合併實體和非流動股權證券的投資 | | | ||||
其他 |
| |
| | ||
總資產 | $ | | $ | | ||
負債和股東權益 | ||||||
流動負債: | ||||||
應付賬款 | $ | | $ | | ||
應計費用 |
| |
| | ||
遞延收入和其他合同負債 |
| |
| | ||
經營租賃負債 | | | ||||
融資租賃負債 | | | ||||
財務義務 | | | ||||
可轉換優先票據的當前部分，淨值 | | — | ||||
開多次數 | | | ||||
待決條件、服務合同損失計提及其他流動負債 |
| |
| | ||
總流動負債 |
| |
| | ||
遞延營收和其他合同負債 |
| |
| | ||
經營租賃負債 | | | ||||
融資租賃負債 | | | ||||
財務義務 |
| |
| | ||
可轉換的優先票據，淨額 | | | ||||
長期債務 | | | ||||
因果考慮、服務合同損失計提和其他負債 |
| |
| | ||
總負債 |
| |
| | ||
股東權益: | ||||||
普通股，每股面值爲 $0.0001； |
| |
| | ||
資本公積 |
| |
| | ||
累計其他綜合損失 |
| ( |
| ( | ||
累積赤字 |
| ( |
| ( | ||
公司庫藏股較少: | ( | ( | ||||
股東權益總額 |
| |
| | ||
負債和股東權益總額 | $ | | $ | | ||
The 附註是這些未經審計的中期簡明綜合財務報表的重要組成部分。
3
普拉格能源公司及其子公司
簡明的彙總操作表
(以千爲單位，除每股金額和每股股數外)
(未經審計)
截至三個月結束 | 截至九個月結束 | ||||||||||
九月三十日， | 九月三十日， | ||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 | |||||
淨營業收入： | |||||||||||
設備銷售、相關基礎設施和其他 | $ | | $ | | $ | | $ | | |||
在燃料電池系統及相關基礎設施上進行的服務 | | | | | |||||||
電力購買協議 | |
| | |
| | |||||
燃料交付給客戶及相關設備 | |
| | |
| | |||||
其他 | | | | | |||||||
淨收入 | | | | | |||||||
營業成本： | |||||||||||
設備銷售、相關製造行業和其他 | |
| | |
| | |||||
在燃料電池系統及相關基礎設施上進行的服務 | |
| | |
| | |||||
與服務相關的損失合同準備金 | | | | | |||||||
電力購買協議 | |
| | |
| | |||||
燃料交付給客戶及相關設備 | |
| | |
| | |||||
其他 | |
| | |
| | |||||
營業成本總額 | |
| | |
| | |||||
毛損失 | ( |
| ( | ( |
| ( | |||||
營業費用： | |||||||||||
研發費用 | | | | | |||||||
銷售、一般和管理費用 | | | | | |||||||
重組費用 | | — | | — | |||||||
減值 | | | | | |||||||
可變報酬款項公允價值變動 | | | ( | | |||||||
總營業費用 | | | | | |||||||
營業虧損 | ( | ( | ( | ( | |||||||
利息收入 | |
| | |
| | |||||
利息支出 | ( | ( | ( | ( | |||||||
其他收入/（費用），淨額 | |
| | ( |
| ( | |||||
投資實現收益，淨額 | — | — | — | | |||||||
可供出售證券的除外長期減值 | — | ( | — | ( | |||||||
股權證券公允價值變動 | — | | — | | |||||||
投資權益法損失 | ( | ( | ( | ( | |||||||
歸還可轉換優先票據的損失 | — | — | ( | — | |||||||
稅前虧損 | $ | ( | $ | ( | $ | ( | $ | ( | |||
所得稅支出/受益 | ( |
| | |
| | |||||
每股數據 | $ | ( | $ | ( | $ | ( | $ | ( | |||
每股淨虧損： | |||||||||||
基本和稀釋 | $ | ( | $ | ( | $ | ( | $ | ( | |||
普通股加權平均流通股數 | |
| | |
| | |||||
相關注釋是這些未經審計的中期彙總財務報表的必要組成部分。
4
普拉格能源公司及其子公司
壓縮綜合損失陳述
(單位：千美元)
(未經審計)
截至三個月結束 | 截至九個月結束 | |||||||||||
九月三十日， | 九月三十日， | |||||||||||
| 2024 |
| 2023 | 2024 |
| 2023 | ||||||
淨損失 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
其他綜合收益/(虧損): | ||||||||||||
外匯翻譯收益/（損失） |
| |
| ( |
| |
| | ||||
可供出售證券淨未實現收益變動 | — | | — | | ||||||||
從累計其他綜合收益/(虧損)中重新分類的金額: | ||||||||||||
可供出售證券的除時裝下降 | — | | — | | ||||||||
公司可歸屬的綜合虧損，稅後 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
相關注釋是這些未經審計的中期彙總財務報表的必要組成部分。
5
普拉格能源公司及其子公司
股東權益的簡化合並報表
（單位：千元，股份數量除外）
(未經審計)
|
|
|
|
|
|
| 累積的 |
|
|
|
|
|
| |||||||||
額外 | 其他 | 總計 | ||||||||||||||||||||
普通股 | 實收資本 | 綜合 | 庫藏股 | 累積的 | 股東權益 | |||||||||||||||||
| 股份 |
| 金額 |
| 資本 |
| 收益/(損失) |
| 股份 |
| 金額 |
| 赤字 |
| 股東權益 | |||||||
2023年12月31日 |
| | $ | | $ | | $ | ( |
| | $ | ( | $ | ( | $ | | ||||||
淨損失 | — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||||
其他綜合損失 | — |
| — |
| — |
| ( |
| — |
| — |
| — | ( | ||||||||
股票獎勵 | |
| |
| |
| — |
| — |
| — |
| — |
| | |||||||
公開發行，普通股，扣除發行成本後淨額 | | | | — | — | — | — | | ||||||||||||||
股票期權行權，並在授予/解鎖受限制股票和受限制股票單位獎勵時發行普通股 | ( |
| ( |
| |
| — |
| — |
| — |
| — |
| | |||||||
公司從員工行使期權、限制股票解鎖和限制股票單位授予中獲得的庫存 | — | — | — | — | | ( | — | ( | ||||||||||||||
認股權證負債準備 | — | — | | — | — | — | — | | ||||||||||||||
酒精飲料銷售 $ 32,907 45.5％ $ 30,136 42.1％ $ 66,223 |
| | $ | | $ | | $ | ( |
| | $ | ( | $ | ( | $ | | ||||||
淨損失 | — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||||
其他綜合收益 | — |
| — |
| — |
| |
| — |
| — |
| — | | ||||||||
股票獎勵 | |
| |
| |
| — |
| — |
| — |
| — |
| | |||||||
公開發行，普通股，扣除發行成本淨額 | | | | — | — | — | — | | ||||||||||||||
期權行使和普通股授予/受限股和受限股單位獎勵授予後的普通股發行 | |
| |
| |
| — |
| — |
| — |
| — |
| | |||||||
財政部門自員工行使期權和限制性股票解鎖以及限制性股票單位獲獎時收購的庫存股 | — | — | — | — | | ( | — | ( | ||||||||||||||
併購中以股票支付的未來業績獎勵 | | | | — | — | — | — | | ||||||||||||||
認股權證負債準備 | — | — | | — | — | — | — | | ||||||||||||||
2024年6月30日 |
| | $ | | $ | | $ | ( |
| | $ | ( | $ | ( | $ | | ||||||
淨損失 | — | — | — | — | — | — | ( | ( | ||||||||||||||
其他綜合收益 | — | — | — | | — | — | — | | ||||||||||||||
股票獎勵 | | | | — | — | — | — | | ||||||||||||||
公開發行，普通股，扣除發行成本後淨額 | | | | — | — | — | — | | ||||||||||||||
股票期權行使和在授予/授予的受限股票和受限股票單位獎項上發行普通股 | | | | — | — | — | — | | ||||||||||||||
從員工行使股票期權、解禁限制性股票和限制性股票單位獎勵中獲得的庫存 | — | — | — | — | | ( | — | ( | ||||||||||||||
認股權證負債準備 | — | — | | — | — | — | — | | ||||||||||||||
2024年9月30日 | | $ | | $ | | $ | ( | | $ | ( | $ | ( | $ | | ||||||||
2022年12月31日 |
| | $ | | $ | | $ | ( |
| | $ | ( | $ | ( | $ | | ||||||
淨損失 | — | — | — | — | — | — | ( | ( | ||||||||||||||
其他綜合收益 | — | — | — | | — | — | — | | ||||||||||||||
股票獎勵 | | | | — | — | — | — | | ||||||||||||||
期權行權和在授予/解鎖限制性股票以及限制性股票單元獎勵期間發行普通股 | | | | — | — | — | — | | ||||||||||||||
從員工行使期權、股票限制解除以及限制性股票單位授予中收購的庫存股 | — | — | — | — | | ( | — | ( | ||||||||||||||
warrants行使 | | | ( | — | — | — | — | — | ||||||||||||||
認股權證負債準備 | — | — | | — | — | — | — | | ||||||||||||||
2023年3月31日 | | $ | | $ | | $ | ( | | $ | ( | $ | ( | $ | | ||||||||
淨損失 | — | — | — | — | — | — | ( | ( | ||||||||||||||
其他綜合收益 | — | — | — | | — | — | — | | ||||||||||||||
股票獎勵 | | | | — | — | — | — | | ||||||||||||||
期權行權和發行普通股，以及受限股和受限股單位獎項授予後的普通股發放/歸屬 | | | | — | — | — | — | | ||||||||||||||
從員工行使期權、限制性股票和限制性股票單位授予中收購的庫存股 | — | — | — | — | | ( | — | ( | ||||||||||||||
warrants行使 | | | ( | — | — | — | — | — | ||||||||||||||
認股權證負債準備 | — | — | | — | — | — | — | | ||||||||||||||
來自收購的股票支付的分期付款 | | | | — | — | — | — | | ||||||||||||||
2023年6月30日 | | $ | | $ | | $ | ( | | $ | ( | $ | ( | $ | | ||||||||
淨損失 | — | — | — | — | — | — | ( | ( | ||||||||||||||
其他綜合收益 | — | — | — | | — | — | — | | ||||||||||||||
股票獎勵 | | | | — | — | — | — | | ||||||||||||||
股票期權行權以及在授予/解禁限制股票和限制性股票單位獎勵後發行普通股 | | | | — | — | — | — | | ||||||||||||||
從員工行使期權、授予限制性股票和限制性股票單位獎勵時取得的庫藏股 | — | — | — | — | | ( | — | ( | ||||||||||||||
認股權證負債準備 | — | — | | — | — | — | — | | ||||||||||||||
2023年9月30日 | | $ | | $ | | $ | ( | | $ | ( | $ | ( | $ | | ||||||||
相關注釋是這些未經審計的中期彙總財務報表的必要組成部分。
6
普拉格能源公司及其子公司
簡明的綜合現金流量表
(單位：千美元)
(未經審計)
截至九個月結束 | ||||||
| 2024 | 2023 | ||||
經營活動 | ||||||
淨損失 | $ | ( | $ | ( | ||
調整爲將淨虧損與經營活動中使用的現金相協調： | ||||||
長期資產折舊 |
| |
| | ||
無形資產攤銷 |
| |
| | ||
成本或淨實現價值存貨調整和過剩及過時存貨準備 | | | ||||
基於股票的補償 |
| |
| | ||
歸還可轉換優先票據的損失 | | — | ||||
（收回）/資產賬面應收賬款減值準備 | ( | | ||||
在可轉換高級票據和長期債務上攤銷債務發行成本的溢價/貼現 | ( | | ||||
認股權證負債準備 | | | ||||
遞延所得稅收益 | ( | ( | ||||
減值 | | | ||||
(回收)/服務合同損失 | ( | | ||||
長期資產出售損失 | | — | ||||
對待定對價的公允價值調整 | ( | | ||||
投資成果的淨實現收益 | — | ( | ||||
可供出售證券的除時裝下降 | — | | ||||
可供出售證券溢價計入資產總額 | — | ( | ||||
租賃原始成本 | ( | ( | ||||
股票的公允價值變動 | — | ( | ||||
投資權益法損失 | | | ||||
衍生金融工具公允價值變動損益 | | — | ||||
經營資產和負債的變動提供/使用現金： | ||||||
應收帳款 |
| |
| ( | ||
庫存 |
| |
| ( | ||
合同資產 | ( | ( | ||||
預付費和其他資產 |
| ( |
| ( | ||
應付賬款、應計費用和其他負債 |
| ( |
| | ||
支付相關條件的報酬 | ( | ( | ||||
遞延營收和其他合同負債 |
| ( |
| | ||
經營活動使用的現金淨額 |
| ( |
| ( | ||
投資活動 | ||||||
採購物業、廠房和設備 |
| ( |
| ( | ||
購買與電力購買協議相關的設備和交付給客戶的燃料相關的設備 | ( | ( | ||||
可供出售證券到期收回的款項 | — | | ||||
股票出售收益 | — | | ||||
出售長期資產的收益 | | — | ||||
購買非合併實體和非流通權益證券的現金支付 | ( | ( | ||||
投資活動產生的淨現金流量（使用）/提供 |
| ( |
| | ||
籌資活動 | ||||||
支付相關條件的報酬 | ( | ( | ||||
公開和私人發行的募集資金淨額，扣除交易成本 | | — | ||||
代表員工進行股票補償的淨股票結算的稅收代扣款 | ( | ( | ||||
行使股票期權所得 |
| |
| | ||
償還長期債務本金 | ( | ( | ||||
來自金融義務的收入 | | | ||||
財務債務和融資租賃的本金償還 | ( | ( | ||||
籌資活動產生的現金淨額 |
| |
| | ||
匯率變動對現金的影響 |
| |
| | ||
現金及現金等價物減少 |
| ( |
| ( | ||
受限現金的減少/增加 | ( | | ||||
期初現金、現金等價物和受限制現金 |
| |
| | ||
期末現金、現金等價物及受限現金 | $ | | $ | | ||
現金流量補充披露 | ||||||
截至2024年9月30日，支付的現金利息總額，扣除資本化利息，數爲 $ | $ | | $ | | ||
非現金活動摘要 | ||||||
使用權資產的確認 - 融資租賃 | $ | | $ | | ||
使用權資產的確認 - 操作租賃 | | | ||||
庫存與長期資產之間的淨轉移 | | | ||||
通過普通股和warrants支付的併購收益 | | | ||||
通過融資協議購買的長期資產 | | — | ||||
應計固定資產購置款，現金將在後續時期支付 | | | ||||
相關注釋是這些未經審計的中期彙總財務報表的必要組成部分。
7
1. 業務性質
Plug Power Inc.（以下簡稱「公司」、「Plug」、「我們」或「我們的」）通過創新尖端的氫氣和燃料電池解決方案，促進了向越來越電氣化的世界的轉變。雖然我們繼續開發商業可行的氫氣和燃料電池產品解決方案，但我們已將我們的產品擴展到支持多種可以使用清潔氫氣驅動的商業運營。我們提供電解質，允許客戶（如煉油廠、化學品生產商、鋼鐵、化肥和商業加油站等）在現場產生氫氣。我們的工作重點是（a）工業移動應用，包括電動叉車和電動工業車輛，適用於多班次、高產量製造和高送轉分銷站點，在這些站點，我們相信我們的產品和服務提供了生產力、靈活性和環保福利的獨特組合；（b）氫氣生產；和（c）用於支持關鍵運營的靜態電源系統，例如數據中心、微網和發電設施，可用作備用電源或持續電源，並取代電池、柴油發電機或電信物流、運輸和公用事業客戶的電網。Plug希望通過垂直整合的產品生態系統支持這些產品和客戶，該生態系統可生產、運輸、存儲和處理、分配和使用氫氣，用於移動和電力應用。
流動性和資本資源
公司的運營資本爲$
2024年11月7日，公司與b. Riley簽訂了原ATm協議的第二次修正案（「修正案2」和ATm協議一起稱爲「修訂後的ATm協議」）。修正案2將公司根據修改後的ATm協議可以提供和出售的普通股總髮行價格增加了約
2024年11月11日，公司與YA II PN，Ltd.簽訂了債券購買協議，根據協議，公司同意向投資者出售和發行一份未擔保可轉換債券，總本金額爲$
8
預計將於2024年11月12日或前後閉市發行可轉換債券，視一般交割條件而定。欲知詳情，請參閱附註24，「後續事項」。
2024年7月22日，公司出售了
本公司認為，其營運資金和現金狀況，以及根據修訂的ATm協議，享有將b. Riley指示直接從公司購買股份的權利，將足以資助其至少12個月內未經審核的中期綜合財務報表的發行後進行的營運。
2. 重要會計政策摘要
合併原則
未經審核的中期綜合財務報表包括本公司及其全資子公司的財務報表。在合併中已消除公司間的結餘和交易。此外，我們根據我們對HyVia SAS、AccionaPlug S.L.、Sk Plug Hyverse Co., Ltd.和Clean H2 Infra Fund的經濟持股權和對HyVia、AccionaPlug、Sk Plug Hyverse和Clean H2 Infra Fund的營運和財務決策具有重大影響力的能力，按據權益法計入我們與雷諾汽車（“雷諾”）的合資企業HyVia SAS的業績。
中期基本報表
附屬的未經審核的中期簡明綜合財務報表乃按照證券交易委員會（“SEC”）的規則和法規編制。經管理層的意見，已做出根據美國通用會計準則（“GAAP”）誠實呈現、符合要求的經營狀況、營運結果和現金流狀況的所有期間，所有調整僅包括正常的週期性調整。所呈現的中期營運結果並不能必然代表整年的結果。
根據GAAP編制的年度綜合財務報表通常包含的某些資訊和腳註披露已被縮編或省略。應當閱讀這些未經審核的中期簡明綜合財務報表，並應與公司於截至2023年12月31日的財政年度的已審計綜合財務報表及其附註一同閱讀，該附件包括於公司2023年度報告第10-K表中的綜合財務報表。
隨附的未經審核中期簡明綜合資產負債表所呈現的資訊截至2023年12月31日乃源自公司2023年度已審計綜合財務報表。
此處所包含的未經審核的暫編綜合財務報表應與我們2023年第10-K表一併閱讀。.
清潔氫生產稅收抵免
從2024年第二季度開始，公司確定符合2022年通貨膨脹減少法案（IRA）第45V條規定的清潔氫生產稅收抵免（PTC），這是由公司位於喬治亞州的氫生產廠運作帶來的。 PTC適用於符合條件的清潔氫在...開始的期間內生產和銷售。公司已選擇選擇性支付，也稱為直接支付，適用於2024稅年。此選擇使PTC可退還，因為公司可以從美國國稅局獲得該信用的全部價值。本選擇將適用於2024年稅年和 從合格的清潔氫生產設施最初投入使用的日期起。公司已選擇選擇性支付，也稱為直接支付，適用於2024稅年。此選擇使PTC可退還，因為公司可以從美國國稅局獲得該信用的全部價值。此選擇將適用於2024年稅年和 未來稅年除非
9
已被撤銷。在剩餘的十年期間內，公司可以選擇將所有或部分PTC轉讓給第三方買家，以換取現金。
近期會計宣告
最近採用的會計準則指引
我們採用新的會計準則後，報告的財務狀況、營運結果和現金流量沒有出現重大變化。
近期會計指導尚未生效
除了我們2023年表格10-k中提到的標準外，截至2024年9月30日，所有已發出但尚未生效的會計和報告標準要么不適用於本公司，或預期對本公司不會產生重大影響。
3. 擴展維護合約
我們每季度評估任何與我們銷售設備、相關的製造行業和其他已售出的擴展維護合約相關的潛在損失。
Nine months ended | 截至年終 | ||||
2024年9月30日 |
| 2023年12月31日 | |||
期初餘額 | $ | | $ | ||
損失準備 | | ||||
發佈服務銷售成本 | ( | ( | |||
增加與客戶warrants相關的損失準備 | | | |||
外幣翻譯調整 | | | |||
期末餘額 | $ | | $ | ||
4. 每股盈利
每普通股的基本收益是通過將淨損失除以報告期內流通的普通股加權平均數來計算的。由於公司處於淨虧損狀態，因此所有普通股的等價物會被視為反稀釋的，因此不包括在稀釋每股收益的計算中。因此，基本和稀釋每股虧損是相同的。
10
潛在的稀釋性證券總結如下：
截至9月30日， | ||||
2024 |
| 2023 | ||
未行使的股票期權（1） | |
| | |
限制性股票和限制性股票單位未到期(2) | |
| | |
普通股warrants(3) | | | ||
可轉換的高級票據(4) | |
| | |
普通股的潛在稀釋股份數量 | |
| | |
| (1) | 在截至三個月的期間內 九月 截至2024年和2023年，公司授予了期權， |
| (2) | During the three months ended September 30, 2024 and 2023, the Company granted |
| (3) | 在2024年5月，公司發行了與與Giner ELX, Inc.（「Giner」）的收益結算協議相關的warrants，如註釋15「公允價值測量」所述，公司註冊了可轉售高達 |
在2022年8月，公司發行了一份warrant，允許其收購最多
2017年4月，公司發行了一個warrants，允許購買最多
在2017年7月，公司發行了一個warrant，以收購最多
| (4) | 在2024年3月，公司交換了總額爲 $ |
在2020年5月，公司發行了
11
5. 存貨
截至 九月 2024年30日和2023年12月31日的庫存情況如下（以千爲單位）：
| 2022年9月30日 |
| 12月31日 | |||
2024 | 2023 | |||||
原材料和供應品-生產地點 | $ | | $ | | ||
原材料和供應品-客戶地點 | | | ||||
在製品 |
| |
| | ||
成品 |
| |
| | ||
存貨 | $ | | $ | | ||
庫存由原材料和物料、在製品以及成品組成。公司的庫存準備金由過剩和過時物品以及與成本或淨現金價值相關的調整金額組成$
6. 財產、廠房及設備
截至2024年9月30日和2023年12月31日，物業、廠房和設備資產如下（單位：千美元）：
九月30日， | 12月31日， | |||||
2024 | 2023 | |||||
土地 | $ | | $ | | ||
施工進度 | | | ||||
氫氣生產工廠 | | | ||||
租賃改良 | | | ||||
軟件、機械和設備 |
| |
| | ||
房地產、廠房和設備 |
| |
| | ||
減：累計折舊 |
| ( |
| ( | ||
物業、廠房和設備-淨額 | $ | | $ | | ||
施工進展主要包括施工
與房地產、機器設備相關的折舊費用爲$
7. 無形資產
截至2024年9月30日，公司已獲取的可識別無形資產的總賬面金額和累計攤銷如下（以千爲單位）：
加權平均 | 總賬面價值 | 累積 | |||||||||
攤銷期 | 金額 | 攤銷 | 總額 | ||||||||
取得的技術。 |
|
| $ | | $ | ( | $ | | |||
幹堆疊電解技術 | | ( | | ||||||||
客戶關係、商標和其他 |
| | ( | | |||||||
$ | | $ | ( | $ | | ||||||
12
截至2023年12月31日，公司已獲取的可識別無形資產的總賬面價值和累計攤銷如下（以千元爲單位）：
加權平均 | 總賬面價值 | 累積 | |||||||||
攤銷期 | 金額 | 攤銷 | 總額 | ||||||||
已獲得技術 |
| $ | | $ | ( | $ | | ||||
乾式堆疊電解技術 | | ( | | ||||||||
客戶關係、商標和其他 |
|
| | ( |
| | |||||
$ | | $ | ( | $ | | ||||||
截至2023年12月31日，獲取的技術及客戶關係、商業名稱和其他資產的總淨額髮生了變化。 九月 30, 2024年是由於外幣貶值。
截至三個月的獲得的可識別無形資產的攤銷費用 九月 30, 2024年和2023年分別爲百萬美元。
未來幾年預計的攤銷費用如下（以千爲單位）：
2024年餘下的時間 | $ | | |
2025 | | ||
2026 | | ||
2027 | | ||
2028 | | ||
2029年及以後 | | ||
總計 | $ | |
8. 應計費用
截至2024年9月30日和2023年12月31日的應計費用(以千爲單位)包括:
| 九月30日， |
| 12月31日， | |||
2024 | 2023 | |||||
累積的工資和與補償相關的成本 | $ | | $ | | ||
資本支出的應計 | | | ||||
應計應付賬款 | | | ||||
應計銷售額和其他稅收 | | | ||||
應計利息 | | | ||||
應計其他 | | | ||||
總計 | $ | | $ | | ||
9. 開多期債務
在2024年第二季度，公司開始償還一筆$的本金和利息
13
2020年6月，公司在收購United Hydrogen Group Inc.的過程中收購了債務。 截至2024年9月30日的三個月內 九月 2024年和2023年， 公司償還了$
2024年12月31日 | | |
2025年12月31日 | | |
2026年12月31日 | | |
未償還本金總額 | $ | |
10. 可轉換優先票據
2024年3月20日，公司與公司未償還的某些持有人簽訂了單獨的、私下談判的交換協議
此次交易被歸類爲債務全額償還。因此，公司在2024年第一季度未經審計的中期摘要綜合利潤表中記錄了債務全額償還損失$
該
可轉換高級票據的轉換率爲
在特定例外和特定條件下，持有人
14
在到期之前以現金方式按贖回價格等於的「變更」（如契約中定義）進行贖回，
該
In certain circumstances, conversions of
該
9月30日, | ||
2024 | ||
本金金額： | ||
主要 | $ | |
未攤銷的債務溢價，扣除發行成本（1） | | |
淨賬面價值 | $ | |
| (1) | 包含在未經審計的中期簡明合併資產負債表中，屬於可轉換的高級票據，淨額並通過有效利率法在票據的剩餘期限內攤銷。 |
以下表格總結了與總利息支出和有效利率相關的信息。
截至三個月 | 截至九個月 | |||||
| 2024年9月30日 |
| 2024年9月30日 | |||
利息支出 | $ | | $ | | ||
溢價攤銷 | ( | ( | ||||
總計 | $ | | $ | | ||
有效利率 | ||||||
截至2024年10月30日，% 可轉換高級票據的預計公允價值爲大約$
2020年5月18日，公司發行了$
15
of the
The
September 30, | December 31, | ||||
2024 | 2023 | ||||
Principal amounts: | |||||
Principal | $ | | $ | | |
Unamortized debt issuance costs (1) | ( | ( | |||
Net carrying amount | $ | | $ | | |
| (1) | Included in the unaudited interim condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the notes using the effective interest rate method. |
The following table summarizes the total interest expense and effective interest rate related to the
Three months ended | Nine months ended | |||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 |
| September 30, 2023 | |||||||
Interest expense | $ | | $ | | $ | | $ | | ||||
Amortization of debt issuance costs | | | | | ||||||||
Total | $ | | $ | | $ | | $ | | ||||
Effective interest rate | ||||||||||||
The estimated fair value of the
Capped Call
In conjunction with the pricing of the
The net cost incurred in connection with the
In March 2018, the Company issued $
16
18, 2020, the Company amended and extended the maturity of the Common Stock Forward to June 1, 2025. The number of shares of common stock that the Company will ultimately repurchase under the Common Stock Forward is subject to customary anti-dilution adjustments. The Common Stock Forward is subject to early settlement or settlement with alternative consideration in the event of certain corporate transactions.
The net cost incurred in connection with the Common Stock Forward of $
There were
11. Stockholders’ Equity
At Market Issuance Sales Agreement
On January 17, 2024, the Company entered into an At Market Issuance Sales Agreement with B. Riley, pursuant to which the Company may, from time to time, offer and sell through or to B. Riley, as sales agent or principal, shares of the Company’s common stock, having an aggregate offering price of up to $
Public Offering of Common Stock
On July 22, 2024, the Company sold
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is comprised of unrealized gains and losses on available-for-sale securities (prior periods ending September 30, 2023 only) and foreign currency translation gains and losses. There were
Net current-period other comprehensive income for the three months ended September 30, 2024 increased due to foreign currency translation gains of $
Net current-period other comprehensive income for the nine months ended September 30, 2024 increased due to foreign currency translation gains of $
17
12. Warrant Transaction Agreements
Amazon Transaction Agreement in 2022
On August 24, 2022, the Company and Amazon entered into a Transaction Agreement (the “2022 Amazon Transaction Agreement”), under which the Company concurrently issued to Amazon.com NV Investment Holdings LLC, a wholly owned subsidiary of Amazon, a warrant (the “2022 Amazon Warrant”) to acquire up to
Upon the consummation of certain change of control transactions (as defined in the 2022 Amazon Warrant) prior to the vesting of at least
On August 24, 2022,
As of September 30, 2024 and December 31, 2023,
18
The assumptions used to calculate the valuations of the 2022 Amazon Warrant as of August 24, 2022 and September 30, 2024 are as follows:
Tranches 1-3 |
| Tranche 4 | ||
August 24, 2022 | September 30, 2024 | |||
Risk-free interest rate | ||||
Volatility | ||||
Expected average term (years) | ||||
Exercise price | $ | $ | ||
Stock price | $ | $ |
Walmart Transaction Agreement
On July 20, 2017, the Company and Walmart entered into a Transaction Agreement (the “Walmart Transaction Agreement”), pursuant to which the Company agreed to issue to Walmart a warrant (the “Walmart Warrant”) to acquire up to
The exercise price for the first and second tranches of Walmart Warrant Shares was $
As of September 30, 2024 and December 31, 2023,
19
13. Revenue
Disaggregation of revenue
The following table provides information about disaggregation of revenue (in thousands):
Major products/services lines | Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Sales of fuel cell systems | $ | | $ | | $ | | $ | | ||||
Sales of hydrogen infrastructure | | | | | ||||||||
Sales of electrolyzers | | | | | ||||||||
Sales of engineered equipment | | | | | ||||||||
Services performed on fuel cell systems and related infrastructure | | | | | ||||||||
Power purchase agreements | | | | | ||||||||
Fuel delivered to customers and related equipment | | | | | ||||||||
Sales of cryogenic equipment and liquefiers | | | | | ||||||||
Other | | | | | ||||||||
Net revenue | $ | | $ | | $ | | $ | | ||||
Contract balances
The following table provides information about receivables, contract assets and deferred revenue and contract liabilities from contracts with customers (in thousands):
September 30, | December 31, | |||||
2024 | 2023 | |||||
Accounts receivable | $ | | $ | | ||
Contract assets | | | ||||
Deferred revenue and contract liabilities | | | ||||
Contract assets primarily relate to contracts for which revenue is recognized on a straight-line basis; however, billings escalate over the life of a contract. Contract assets also include amounts recognized as revenue in advance of billings to customers, which are dependent upon the satisfaction of another performance obligation. These amounts are included in contract assets on the accompanying unaudited interim condensed consolidated balance sheets.
The deferred revenue and contract liabilities relate to the advance consideration received from customers for services that will be recognized over time (primarily fuel cell and related infrastructure services and electrolyzer systems and solutions). Deferred revenue and contract liabilities also include advance consideration received from customers prior to delivery of products. These amounts are included within deferred revenue and other contract liabilities on the unaudited interim condensed consolidated balance sheets.
20
Significant changes in the contract assets and the deferred revenue and contract liabilities balances during the period are as follows (in thousands):
Contract assets | Nine months ended | Year ended | ||||
September 30, 2024 | December 31, 2023 | |||||
Transferred to receivables from contract assets recognized at the beginning of the period | $ | ( | $ | ( | ||
Change in contract assets related to warrants | | | ||||
Impairment | — | ( | ||||
Revenue recognized and not billed as of the end of the period | | | ||||
Net change in contract assets | $ | | $ | | ||
Deferred revenue and contract liabilities | Nine months ended | Year ended | ||||
September 30, 2024 | December 31, 2023 | |||||
Increases due to customer billings, net of amounts recognized as revenue during the period | $ | | $ | | ||
Change in contract liabilities related to warrants | | | ||||
Revenue recognized that was included in the contract liability balance as of the beginning of the period | ( | ( | ||||
Net change in deferred revenue and contract liabilities | $ | ( | $ | | ||
Estimated future revenue
The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period, including provision for common stock warrants (in thousands):
As of | Expected recognition | |||||
September 30, 2024 | period (years) | |||||
Sales of fuel cell systems | $ | | ||||
Sales of hydrogen installations and other infrastructure | | |||||
Sales of electrolyzers | | |||||
Sales of engineered equipment | | |||||
Services performed on fuel cell systems and related infrastructure | | |||||
Power purchase agreements | | |||||
Fuel delivered to customers and related equipment | | |||||
Sales of cryogenic equipment and other | | |||||
Total estimated future revenue | $ | | ||||
14. Income Taxes
The Company recorded $
The domestic net deferred tax asset generated from the Company’s net operating loss has been offset by a full valuation allowance because it is more likely than not that the tax benefits of the net operating loss carryforward will not
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be realized. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense.
The Organization for Economic Co-operation and Development Inclusive Framework on Base Erosion and Profit Shifting has proposed a global minimum corporate tax rate of 15% on multi-national corporations, commonly referred to as the Pillar Two rules that has been agreed upon in principle by over 140 countries. While the United States has not adopted the Pillar Two rules, numerous foreign countries have enacted legislation to implement the Pillar Two rules, effective beginning January 1, 2024, or are expected to enact similar legislation. As of September 30, 2024, the Company did not meet the consolidated revenue threshold and is not subject to the GloBE Rules under Pillar Two. The Company will continue to monitor the implementation of rules in the jurisdictions in which it operates.
15. Fair Value Measurements
The Company records the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.
In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety.
These levels are:
| ● | Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| ● | Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. |
| ● | Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value. |
There were
Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
As of September 30, 2024 | ||||||||||
Carrying | Fair | Fair Value Measurements | ||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||
Liabilities | ||||||||||
Contingent consideration | $ | | $ | | $ | — | $ | — | $ | |
As of December 31, 2023 | ||||||||||
Carrying | Fair | Fair Value Measurements | ||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||
Liabilities | ||||||||||
Contingent consideration | | | — | — | | |||||
The liabilities measured at fair value on a recurring basis that have unobservable inputs and are therefore categorized as level 3 are related to contingent consideration. The fair value as of September 30, 2024 of $
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In connection with the Joule acquisition, the Company initially recorded on its unaudited interim condensed consolidated balance sheet a liability of $
In connection with the Frames acquisition, the Company initially recorded on its unaudited interim condensed consolidated balance sheet a liability of $
In connection with the United Hydrogen Group Inc. (“UHG”) acquisition, the Company initially recorded on its unaudited interim condensed consolidated balance sheet a liability of $
In connection with the Giner acquisition, the Company initially recorded on its unaudited interim condensed consolidated balance sheet a liability of $
In the unaudited interim condensed consolidated balance sheets, contingent consideration is recorded in the contingent consideration, loss accrual for service contracts, and other current liabilities financial statement line item, and was comprised of the following unobservable inputs as of September 30, 2024:
Financial Instrument |
| Fair Value | Valuation Technique | Unobservable Input | Range (weighted average) | |
Contingent consideration | $ | | Credit spread | |||
Discount rate | ||||||
| ||||||
23
In the unaudited interim condensed consolidated balance sheets, contingent consideration is recorded in the contingent consideration, loss accrual for service contracts, and other current liabilities financial statement line item, and was comprised of the following unobservable inputs as of December 31, 2023:
Financial Instrument |
| Fair Value | Valuation Technique | Unobservable Input | Range (weighted average) | |
Contingent consideration | $ | | Credit spread | |||
Discount rate | ||||||
| ||||||
The change in the carrying amount of Level 3 liabilities during the nine months ended September 30, 2024 was as follows (in thousands):
| Nine months ended | ||
September 30, 2024 | |||
Beginning balance as of December 31, 2023 | $ | | |
Cash payments | ( | ||
Change in fair value of contingent consideration | ( | ||
Foreign currency translation adjustment |
| ( | |
Ending balance as of March 31, 2024 | $ | | |
Cash payments | ( | ||
Payment settled in common stock and warrants | ( | ||
Change in fair value of contingent consideration | | ||
Foreign currency translation adjustment |
| ( | |
Ending balance as of June 30, 2024 | $ | | |
Cash payments | ( | ||
Change in fair value of contingent consideration | | ||
Foreign currency translation adjustment |
| | |
Ending balance as of September 30, 2024 | $ | | |
16. Investments
Equity Method Investments
As of September 30, 2024 and December 31, 2023, the Company accounted for the following investments in the investee’s common stock under the equity method, which are included in the investments in non-consolidated entities and non-marketable equity securities on the unaudited interim condensed consolidated balance sheets (amounts in thousands):
As of September 30, 2024 | As of December 31, 2023 | |||||||||||
| Formation | Common Stock |
| Carrying | Common Stock |
| Carrying | |||||
Investee | Date | Ownership % | Value | Ownership % | Value | |||||||
HyVia | Q2 2021 | $ | $ | ( | ||||||||
AccionaPlug | Q4 2021 | |||||||||||
Clean H2 Infra Fund | Q4 2021 | |||||||||||
SK Plug Hyverse | Q1 2022 | |||||||||||
$ | $ | |||||||||||
As of December 31, 2023, the Company’s investment in HyVia was negative due to historical losses. The Company is committed to fund its share of losses of the joint venture and, therefore, continued to record losses as incurred. The negative equity investment as of December 31, 2023 was recorded on the unaudited interim condensed consolidated balance sheet to the contingent consideration, loss accrual for service contracts, and other liabilities financial statement line item.
During the three months ended September 30, 2024, the Company contributed approximately $
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ended September 30, 2023, the Company contributed approximately $
During the nine months ended September 30, 2024, the Company contributed approximately $
The Company’s capital commitments related to its equity method investments as of September 30, 2024 includes $
17. Operating and Finance Lease Liabilities
As of September 30, 2024, the Company had operating leases, as lessee, primarily associated with sale/leaseback transactions that are partially secured by restricted cash and security deposits (see also Note 19, “Commitments and Contingencies”) as summarized below. These leases expire over the next to
Leases contain termination clauses with associated penalties, the amount of which cause the likelihood of cancellation to be remote. At the end of the lease term, the leased assets may be returned to the lessor by the Company, the Company may negotiate with the lessor to purchase the assets at fair market value, or the Company may negotiate with the lessor to renew the lease at market rental rates. No residual value guarantees are contained in the leases. No financial covenants are contained within the lease; however, the lease contains customary operational covenants such as the requirement that the Company properly maintain the leased assets and carry appropriate insurance. The leases include credit support in the form of either cash, collateral or letters of credit. See Note 19, “Commitments and Contingencies”, for a description of cash held as security associated with the leases.
The Company has finance leases associated with its property and equipment in Slingerlands, New York and at customer fueling locations.
Future minimum lease payments under operating and finance leases (with initial or remaining lease terms in excess of one year) as of September 30, 2024 were as follows (in thousands):
Finance |
| Total | |||||||
| Operating Lease | Lease | Lease | ||||||
Liability | Liability | Liabilities | |||||||
Remainder of 2024 | $ | | $ | | $ | | |||
2025 | |
| | | |||||
2026 | |
| | | |||||
2027 | |
| | | |||||
2028 | | | | ||||||
2029 and thereafter | | | | ||||||
Total future minimum payments | |
| | | |||||
Less imputed interest | ( | ( | ( | ||||||
Total | $ | | $ | | $ | | |||
Rental expense for all operating leases was $
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As of both September 30, 2024 and December 31, 2023, security deposits associated with sale/leaseback transactions were $7.4 million and were included in other assets in the unaudited interim condensed consolidated balance sheets.
Other information related to the operating leases are presented in the following table:
Nine months ended |
| Nine months ended | |||
September 30, 2024 | September 30, 2023 | ||||
Cash payments - operating cash flows (in thousands) | $ | | $ | | |
Weighted average remaining lease term (years) | |||||
Weighted average discount rate | |||||
Finance lease costs include amortization of the right of use assets (i.e., depreciation expense) and interest on lease liabilities (i.e., interest and other expense, net in the unaudited interim condensed consolidated statement of operations) and were $
As of September 30, 2024 and December 31, 2023, the right of use assets associated with finance leases, net was $
Other information related to the finance leases are presented in the following table:
Nine months ended |
| Nine months ended | |||
September 30, 2024 | September 30, 2023 | ||||
Cash payments - operating cash flows (in thousands) | $ | | $ | | |
Cash payments - financing cash flows (in thousands) | $ | | $ | | |
Weighted average remaining lease term (years) | |||||
Weighted average discount rate | |||||
18. Finance Obligation
The Company has sold future services to be performed associated with certain sale/leaseback transactions and recorded the balance as a finance obligation. The outstanding balance of this obligation as of September 30, 2024 was $
During the third quarter of 2024, the Company entered into additional failed sale/leaseback transactions that were accounted for as financing obligations resulting in $
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Future minimum payments under finance obligations notes above as of September 30, 2024 were as follows (in thousands):
Total | |||||||||
Sale of Future | Sale/Leaseback | Finance | |||||||
| Revenue - Debt |
| Financings |
| Obligations | ||||
Remainder of 2024 | $ | | $ | | $ | | |||
2025 | | | | ||||||
2026 | | | | ||||||
2027 | | | | ||||||
2028 | | | | ||||||
2029 and thereafter | | | | ||||||
Total future minimum payments | | | | ||||||
Less imputed interest | ( | ( | ( | ||||||
Total | $ | | $ | | $ | | |||
Other information related to the above finance obligations are presented in the following table:
Nine months ended | Nine months ended | ||||
September 30, 2024 | September 30, 2023 | ||||
Cash payments (in thousands) | $ | | $ | | |
Weighted average remaining term (years) | |||||
Weighted average discount rate | |||||
The fair value of the Company’s total finance obligations approximated their carrying value as of September 30, 2024 and December 31, 2023.
19. Commitments and Contingencies
Restricted Cash
In connection with certain of the above noted sale/leaseback agreements, cash of $
As of September 30, 2024 and December 31, 2023, the Company had $
The Company also had $
Litigation
Legal matters are handled in the ordinary course of business. The outcome of any such matters, regardless of the merits, is inherently uncertain; therefore, assessing the likelihood of loss and any estimated damages is difficult and subject to considerable judgment. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably
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estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. While we are not in a position to accurately predict the outcome of any legal or other proceedings, where there is at least a reasonable possibility that a loss may be incurred, GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss, if material, or make a statement that such an estimate cannot be made. Except for a $
Securities Litigation and Related Stockholder Derivative Litigation
2021 Securities Action and Related Derivative Litigation
One action is pending in which alleged stockholders of the Company assert claims derivatively, on the Company’s behalf, based on allegations and claims that were asserted in In re Plug Power, Inc. Securities Litigation, No. 1:21-cv-2004 (S.D.N.Y.), an earlier putative securities class action that is no longer pending (the “2021 Securities Action”). In an opinion and order entered in August 2023, the district court dismissed the 2021 Securities Action with prejudice, and the plaintiffs in that action did not appeal.
A consolidated stockholder derivative action relating to the claims and allegations in the 2021 Securities Action is pending in the Court of Chancery for the State of Delaware, styled In re Plug Power Inc. Stockholder Derivative Litigation, Cons. C.A. No. 2022-0569-KSJM (Del. Ch.). By stipulation and order, the action was stayed until motions to dismiss were finally resolved in the 2021 Securities Action. On March 8, 2024, the alleged stockholder plaintiffs filed a consolidated amended complaint asserting claims against our officers Andrew J. Marsh, Paul B. Middleton, Gerard L. Conway, Jr., and Keith Schmid, and against our current or former directors George C. McNamee, Gary K. Willis, Maureen O. Helmer, Johannes M. Roth, Gregory L. Kenausis, Lucas Schneider, and Jonathan Silver. The Company is named as nominal defendant. Primarily based on allegations in the 2021 Securities Action, the plaintiffs assert claims against the individual defendants for alleged breaches of fiduciary duty, disgorgement, and unjust enrichment based on alleged transactions in the Company’s securities while allegedly in possession of material non-public information concerning (i) the Company’s financial accounting prior to the announcement that the Company would need to restate certain financial statements and (ii) the potential amendment and termination of a warrant agreement between the Company and a significant customer. On May 10, 2024, the Company, as nominal defendant, and all of the individual defendants filed a motion to dismiss (a) for failure to make a pre-suit demand or to adequately allege demand futility and (b) by the individual defendants, for failure to state a claim. Oral argument on the motion was held on November 4, 2024.
2023 Securities Action and Related Derivative Litigation
A consolidated action is pending in the United States District Court for the District of Delaware asserting claims under the federal securities laws against the Company and certain of its senior officers on behalf of a putative class of purchasers of the Company’s securities, styled In re Plug Power, Inc. Securities Litigation, No. 1:23-cv-00576-MN (the “2023 Securities Action”). The plaintiffs filed a consolidated complaint on September 28, 2023, in which they assert claims under the federal securities laws against the Company and four of its senior officers, Mr. Marsh, Mr. Middleton, Sanjay Shrestha, and former officer David Mindnich, on behalf of a putative class of purchasers of the Company’s common stock between January 19, 2022 and March 1, 2023. The complaint alleges that the defendants made “materially false and/or misleading statements” about the Company’s business and operations, including the Company’s revenue goals for 2022, its ability to effectively manage its supply chain and product manufacturing, and its progress in construction of new hydrogen production capacity. The defendants filed a motion to dismiss the complaint on December 14, 2023, and briefing was completed in March 2024. All proceedings are stayed pending resolution of the motion to dismiss.
Beginning on September 13, 2023, three separate actions were filed in the U.S. District Court for the District of Delaware and in the U.S. District Court for the Southern District of New York asserting claims derivatively, on behalf of the Company, against certain former and current Company officers and directors based on the allegations and claims in the 2023 Securities Action. Those cases have been consolidated in the District of Delaware under the caption In re Plug Power, Inc. Stockholder Deriv. Litig., No. 1:23-cv-01007-MN (D. Del.). The defendants named in the constituent complaint were Mr. Marsh, Mr. Middleton, Mr. Mindnich, Martin Hull, Ms. Helmer, Mr. Kenausis, Mr. McNamee, Mr.
28
Schneider, Mr. Silver, Mr. Willis, and current or former directors Jean Bua, Kavita Mahtani, and Kyungyeol Song. In an order entered on April 26, 2024, the Court approved the parties’ stipulation to stay all proceedings until motions to dismiss have been resolved in the 2023 Securities Action.
2024 Securities Litigation
On March 22, 2024, Ete Adote filed a complaint in the United States District Court for the Northern District of New York asserting claims under the federal securities laws against the Company, Mr. Marsh, and Mr. Middleton, on behalf of an alleged class of purchasers of the Company’s common stock between May 9, 2023 and January 16, 2024, styled Adote v. Plug Power, Inc. et al., No. 1:24-cv-00406-MAD-DJS (N.D.N.Y.). The complaint alleges that the defendants made misstatements concerning the Company’s progress in construction of new hydrogen production capacity and its ability to effectively manage its supply chain. On April 30, 2024, a second complaint asserting substantially similar claims against the same defendants, but on behalf of a putative class of purchasers of the Company’s common stock between March 1, 2023 and January 16, 2024, was filed in the Northern District of New York, styled Lee v. Plug Power, et al., No. 1:24;cv-0598-MAD-DJS (N.D.N.Y.). The Court has approved stipulations in both actions extending the time for all defendants to respond to any pleading until after the Court appoints lead plaintiff(s).
Other Litigation
On May 2, 2023, a lawsuit entitled Jacob Thomas and JTurbo Engineering & Technology, LLC v. Joule Processing, LLC and Plug Power Inc., Case No. 4:23-cv-01615, was filed in the United States District Court for the Southern District of Texas against Joule Processing, LLC and the Company. The only claims that remain are misappropriation of trade secrets under the federal Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836, misappropriation of trade secrets under the Texas Uniform Trade Secrets Act, and breach of contract. Currently pending before the United States District Court for the Southern District of Texas is Plaintiff[s’] Verified Amended Application for Temporary Restraining Order, Preliminary Injunction and Permanent Injunctive Relief, which was filed on November 17, 2023. Also pending is Defendants Joule Processing, LLC’s and the Company’s Motion for Summary Judgment, which was filed on August 19, 2024, and Plaintiffs’ Amended Motion for Partial Summary Judgment, which was filed on October 1, 2024.
On July 24, 2023, an action entitled Felton v. Plug Power, Inc., Case No. 1:23-cv-887, was filed in the U.S. District Court for the Northern District of New York asserting claims against the Company pursuant to the New York State Human Rights Law. The complaint asserts that the plaintiff is seeking damages to redress injuries suffered as a result of harassment and discrimination on the basis of his race, together with creating a hostile work environment, and retaliation. The Company disagrees with plaintiff’s representations about his time at the Company and intends to vigorously defend against his allegations. Plaintiff’s counsel moved to withdraw from the case, which the court approved on March 18, 2024, and therefore plaintiff is now pro se. The current discovery deadline is January 31, 2025.
On October 23, 2024, a case entitled First Solar, Inc. v. Plug Power Inc., Index No. 655610/2024 was filed in the New York State Supreme Court, New York County, asserting a claim for breach of contract associated with a purchase order for solar panels manufactured by First Solar to be purchased by the Company. The complaint seeks monetary relief along with pre-judgment interest.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents, restricted cash and accounts receivable. Cash and restricted cash are maintained in accounts with financial institutions, which, at times may exceed the Federal depository insurance coverage of $
Concentrations of credit risk with respect to receivables exist due to the limited number of select customers with whom the Company has commercial sales arrangements. To mitigate credit risk, the Company performs appropriate evaluation of a prospective customer’s financial condition.
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As of September 30, 2024,
For purposes of assigning a customer to a sale/leaseback transaction completed with a financial institution, the Company considers the end user of the assets to be the ultimate customer. For the three months ended September 30, 2024,
For the nine months ended September 30, 2024,
Guarantee
On May 30, 2023, our joint venture, HyVia, entered into a government grant agreement with Bpifrance. As part of the agreement, our wholly-owned subsidiary, Plug Power France, was required to issue a guarantee to Bpifrance in the amount of €
Unconditional Purchase Obligations
The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, take or pay contracts and service agreements. For certain vendors, the Company’s unconditional obligation to purchase a minimum quantity of raw materials at an agreed upon price is fixed and determinable; while certain other raw material costs will vary due to product forecasting and future economic conditions.
Future payments under non-cancelable unconditional purchase obligations with a remaining term in excess of one year as of September 30, 2024, were as follows (in thousands):
Remainder of 2024 | $ | | |
2025 | | ||
2026 | | ||
2027 | | ||
2028 | — | ||
2029 and thereafter | — | ||
Total | |
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20. Employee Benefit Plans
2011 and 2021 Stock Option and Incentive Plan
The Company has issued stock-based awards to employees and members of its Board of Directors (the “Board”) consisting of stock options and restricted stock and restricted stock unit awards. The Company accounts for all stock-based awards to employees and members of the Board as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized over the requisite service period. Stock-based compensation costs recognized, excluding the Company’s matching contributions of $
The components and classification of stock-based compensation expense, excluding the Company’s matching contributions to the Plug Power Inc. 401(k) Savings & Retirement Plan and quarterly Board compensation, were as follows (in thousands):
Three months ended | Nine months ended | ||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||
Cost of sales | $ | | $ | | $ | | $ | | |||
Research and development | | | | | |||||||
Selling, general and administrative | | | | | |||||||
$ | | $ | | $ | | $ | | ||||
Option Awards
The Company issues options that are time and performance-based awards. All option awards are determined to be classified as equity awards.
Service Stock Options Awards
The following table reflects the service stock option activity for the nine months ended September 30, 2024:
|
| Weighted |
| ||||||||
Weighted | Average | ||||||||||
Average | Remaining | Aggregate | |||||||||
Exercise | Contractual | Intrinsic | |||||||||
Shares | Price | Terms | Value | ||||||||
Options outstanding as of December 31, 2023 | | $ | | $ | | ||||||
Options exercisable as of December 31, 2023 | | | | ||||||||
Options unvested as of December 31, 2023 | | | | ||||||||
Granted | | | — | — | |||||||
Exercised | ( | | — | — | |||||||
Forfeited | ( | | — | — | |||||||
Options outstanding as of September 30, 2024 | | $ | | $ | | ||||||
Options exercisable as of September 30, 2024 | | | | ||||||||
Options unvested as of September 30, 2024 | | $ | | $ | | ||||||
The weighted average grant date fair value of the service stock options granted during the nine months ended September 30, 2024 and 2023 was $
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The total fair value of the service stock options that vested during the nine months ended September 30, 2024 and 2023 was approximately $
Compensation cost associated with service stock options represented approximately $
Market Condition Stock Option Awards
The following table reflects the market condition stock option award activity for the nine months ended September 30, 2024. Solely for the purposes of this table, the number of market condition stock options is based on participants earning the maximum number of market condition stock options (i.e.
|
| Weighted |
| |||||||
Average | ||||||||||
Average | Remaining | Aggregate | ||||||||
Exercise | Contractual | Intrinsic | ||||||||
Shares | Price | Terms | Value | |||||||
Options outstanding as of December 31, 2023 | | $ | | $ | — | |||||
Options exercisable as of December 31, 2023 | | | — | |||||||
Options unvested as of December 31, 2023 | | | — | |||||||
Granted | | | — | — | ||||||
Exercised | — | — | — | — | ||||||
Forfeited | ( | | — | — | ||||||
Options outstanding as of September 30, 2024 | | $ | | $ | — | |||||
Options exercisable as of September 30, 2024 | | | — | |||||||
Options unvested as of September 30, 2024 | | $ | | $ | — | |||||
The weighted average grant-date fair value of the market condition stock options granted during the nine months ended September 30, 2024 and 2023 was $
Compensation cost associated with market condition stock options represented approximately $
As of September 30, 2024, there were
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market condition stock options was $
Restricted Stock and Restricted Stock Unit Awards
The following table reflects the restricted stock and restricted stock unit activity for the nine months ended September 30, 2024 (in thousands except share amounts):
| Weighted |
| Aggregate | |||||
Average Grant Date | Intrinsic | |||||||
Shares | Fair Value | Value | ||||||
Unvested restricted stock as of December 31, 2023 | | $ | | $ | | |||
Granted | | | — | |||||
Vested | ( | | — | |||||
Forfeited | ( | | — | |||||
Unvested restricted stock as of September 30, 2024 | | $ | | $ | | |||
The weighted average grant-date fair value of the restricted stock and restricted stock unit awards granted during the nine months ended September 30, 2024 and 2023 was $
Compensation cost associated with restricted stock and restricted stock unit awards represented approximately $
Included in the total unvested restricted stock and restricted stock units as of September 30, 2024, there were
401(k) Savings & Retirement Plan
The Company issued
The Company’s expense for this plan was approximately $
33
Non-Employee Director Compensation
The Company granted
21. Segment and Geographic Area Reporting
Our organization is managed from a sales perspective based on “go-to-market” sales channels, emphasizing shared learning across end-user applications and common supplier/vendor relationships. These sales channels are structured to serve a range of customers for our products and services. As a result of this structure, we concluded that we have
The revenue and long-lived assets based on geographic location are as follows (in thousands):
Revenues | Revenues | Long-Lived Assets | |||||||||||||||
Three months ended | Nine months ended | As of | |||||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | September 30, 2024 | December 31, 2023 | ||||||||||||
North America | $ | | $ | | $ | | $ | | $ | | $ | | |||||
Europe | | | | | | | |||||||||||
Asia | | | | | | — | |||||||||||
Other | | | | | | | |||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | |||||
22. Related Party Transactions
HyVia
Our
SK Plug Hyverse
Our
34
23. Restructuring
In February 2024, in a strategic move to enhance our financial performance and ensure long-term value creation in a competitive market, we approved a comprehensive initiative that encompasses a broad range of measures, including operational consolidation, strategic workforce adjustments, and various other cost-saving actions (the “Restructuring Plan”). These measures are aimed at increasing efficiency, improving scalability, and maintaining our leadership position in the renewable energy industry. We began executing the Restructuring Plan in February 2024 and expect the Restructuring Plan to be completed in the fourth quarter of 2024, subject to local law and consultation requirements.
The determination of when we accrue for involuntary termination benefits under restructuring plans depends on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. We account for involuntary termination benefits that are provided pursuant to one-time benefit arrangements in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”) whereas involuntary termination benefits that are part of an ongoing written or substantive plan are accounted for in accordance with ASC 712, Nonretirement Postemployment Benefits (“ASC 712”). We accrue a liability for termination benefits under ASC 420 in the period in which the plan is communicated to the employees and the plan is not expected to change significantly. For ongoing benefit arrangements, inclusive of statutory requirements, we accrue a liability for termination benefits under ASC 712 when the existing situation or set of circumstances indicates that an obligation has been incurred, it is probable the benefits will be paid, and the amount can be reasonably estimated. The restructuring charges that have been incurred but not yet paid are recorded in accrued expenses and other current liabilities in our unaudited interim condensed consolidated balance sheets, as they are expected to be paid within the next twelve months.
During the three months ended September 30, 2024, we incurred $
Severance expense recorded during the three and nine months ended September 30, 2024 in accordance with ASC 420 was a result of the separation of full-time employees associated with the Restructuring Plan. As of September 30, 2024, $
24. Subsequent Events
At Market Issuance Sales Agreement
From September 30, 2024 through the date of filing of this Quarterly Report on Form 10-Q, the Company sold
On November 7, 2024, the Company entered into Amendment No. 2 to the Original ATM Agreement (“Amendment No. 2” and together with the ATM Agreement, the “Amended ATM Agreement”) with B. Riley. Amendment No. 2 increased the aggregate gross sales price of the Company’s common stock the Company may offer and sell pursuant to the Amended ATM Agreement by approximately $
35
after November 7, 2024, through and including February 7, 2025, the Company has the right at its sole discretion to direct B. Riley to act on a principal basis and purchase from the Company up to the Maximum Commitment Advance Purchase Amount of $
Debenture Purchase Agreement
On November 11, 2024, the Company entered into a Debenture Purchase Agreement with YA II PN, Ltd. (the “Investor”) under which the Company agreed to sell and issue to the Investor an unsecured convertible debenture in aggregate principal amount of $
The Convertible Debenture bears interest at a rate of
The Investor may convert all or any portion of the principal amount of the Convertible Debenture and if there are certain events of default, the Investor may require the Company to amortize $
The Convertible Debenture includes customary covenants and events of default that are typical for transactions of this type and certain affirmative and negative covenants.
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Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our accompanying unaudited interim condensed consolidated financial statements and notes thereto included within this Quarterly Report on Form 10-Q, and our audited and notes thereto included in our 2023 Form 10-K. In addition to historical information, this Quarterly Report on Form 10-Q and the following discussion contain statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. These forward-looking statements contain projections of our future results of operations or of our financial position or state other forward-looking information. In some cases, you can identify these statements by forward-looking words such as “believe”, “could”, “continue”, “estimate”, “expect”, “forecast”, “intend”, “may”, “should”, “will”, “would”, “plan”, “project” or the negative of such words or other similar words or phrases. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Investors are cautioned not to unduly rely on forward-looking statements because they involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including, but not limited to:
| ● | the anticipated benefits, actual savings and the amount and timing of the costs resulting from the implementation of the Restructuring Plan that was announced in February 2024; |
| ● | our ability to achieve our business objectives and to continue to meet our obligations, which is dependent upon our ability to maintain a certain level of liquidity and will depend in part on our ability to manage our cash flows, including successfully implementing our cost savings initiatives; |
| ● | the risk that we continue to incur losses and might never achieve or maintain profitability; |
| ● | the risk that we will need to raise additional capital to fund our operations and such capital may not be available to us; |
| ● | the risk that we may not be able to expand our business or manage our future growth effectively; |
| ● | the risk of loss related to an inability to maintain an effective system of internal control over financial reporting; |
| ● | the risk that delays in or not completing our product development and hydrogen plant construction goals may adversely affect our revenue and profitability; |
| ● | the risk that we may not be able to obtain from our hydrogen suppliers a sufficient supply of hydrogen at competitive prices or the risk that we may not be able to produce hydrogen internally at competitive prices; |
| ● | our ability to achieve the forecasted revenue and costs on the sale of our products; |
| ● | the risk that we may not be able to convert all of our estimated future revenue into revenue and cash flows; |
| ● | the risk that purchase orders may not ship, be installed and/or converted to revenue, in whole or in part; |
| ● | the risk that some or all of the recorded intangible assets and property, plant, and equipment could be subject to impairment; |
| ● | the risks associated with global economic uncertainty, including inflationary pressures, fluctuating interest rates, currency fluctuations, and supply chain disruptions; |
| ● | the risk of elimination, reduction of, or changes in qualifying criteria for government subsidies and economic incentives for alternative energy products, including with regards to the impact of the Inflation Reduction Act on our business; |
| ● | the risk that the funding of our loan guarantee from the Department of Energy may be delayed and the risk that we may not be able to satisfy all of the technical, legal, environmental or financial conditions acceptable to the Department of Energy to receive the loan guarantee; |
| ● | the risk that our lack of extensive experience in manufacturing and marketing of certain of our products may impact our ability to manufacture and market said products on a profitable and large-scale commercial basis; |
| ● | the risk that a sale or issuance of a significant number of shares of stock could depress the market price of our common stock; |
| ● | the risk of dilution to our stockholders and/or impact to our stock price should we need to raise additional capital; |
| ● | the risk that negative publicity related to our business or stock could result in a negative impact on our stock value and profitability; |
| ● | our ability to leverage, attract and retain key personnel; |
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| ● | the risks associated with legal proceedings and legal compliance, including the challenges of predicting the outcome of legal proceedings and similar disputes with certainty and the significant judgment calls required to determine reserves for any litigation; |
| ● | the risk that a loss of one or more of our major customers, or the delay in payment or the failure to pay receivables by one of our major customers, could have a material adverse effect on our financial condition; |
| ● | the risk of potential losses related to any contract disputes; |
| ● | the risk of potential losses related to any product liability claims; |
| ● | the cost and timing of developing, marketing, and selling our products; |
| ● | the risks involved with participating in joint ventures, including our ability or inability to execute our strategic growth plan through joint ventures; |
| ● | our ability to obtain financing arrangements to support the sale or leasing of our products and services to customers; |
| ● | the cost and availability of fuel and fueling infrastructures for our products; |
| ● | the risk that our convertible senior notes, if settled in cash, could have a material adverse effect on our financial results; |
| ● | the risk that our convertible note hedges may affect the value of our convertible senior notes and our common stock; |
| ● | the risks related to the use of flammable fuels in our products; |
| ● | the risks, liabilities, and costs related to environmental, health, and safety matters; |
| ● | market acceptance of our products and services; |
| ● | our ability to establish and maintain relationships with third parties with respect to product development, manufacturing, distribution, and servicing, and the supply of key product components; |
| ● | the risk that we may be unable to successfully pursue, integrate, or execute upon our new business ventures; |
| ● | the cost and availability of components and parts for our products; |
| ● | the risk that possible new tariffs could have a material adverse effect on our business; |
| ● | our ability to develop commercially viable products; |
| ● | our ability to reduce product and manufacturing costs; |
| ● | our ability to successfully market, distribute and service our products and services internationally; |
| ● | our ability to improve system reliability for our products; |
| ● | competitive factors, such as price competition and competition from other traditional and alternative energy companies; |
| ● | our ability to protect our intellectual property; |
| ● | the risks related to our operational dependency on information technology and the risk of the failure of such technology, including failure to effectively prevent, detect, and recover from security compromises or breaches, including cyber-attacks; |
| ● | the cost of complying with current and future federal, state and international governmental regulations; |
| ● | the risks associated with past and potential future acquisitions; |
| ● | the risks associated with geopolitical instability, including the conflicts in the Middle East and between Russia and Ukraine as well as tensions between U.S. and China and neighboring regions; and |
| ● | the volatility of our stock price. |
The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance, including factors and risks discussed in the section titled “Risk Factors” included under Part I, Item 1A, in our 2023 Form 10-K and supplemented by Part II, Item 1A of the Quarterly Report on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and Part II, Item 1A of this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from these contained in any forward-looking statements. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. These forward-looking statements speak only as of the date on which the statements were made. Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q.
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References in this Quarterly Report on Form 10-Q to “Plug”, the “Company”, “we”, “our” or “us” refer to Plug Power Inc., including as the context requires, its subsidiaries.
Overview
Plug is facilitating the paradigm shift to an increasingly electrified world by innovating cutting-edge hydrogen and fuel cell solutions.
While we continue to develop commercially viable hydrogen and fuel cell product solutions, we have expanded our offerings to support a variety of commercial operations that can be powered with clean hydrogen. We provide electrolyzers that allow customers — such as refineries, producers of chemicals, steel, fertilizer and commercial refueling stations — to generate hydrogen on-site. We are focusing our efforts on (a) industrial mobility applications, including electric forklifts and electric industrial vehicles, at multi shift high volume manufacturing and high throughput distribution sites where we believe our products and services provide a unique combination of productivity, flexibility, and environmental benefits; (b) production of hydrogen; and (c) stationary power systems that will support critical operations, such as data centers, microgrids, and generation facilities, in either a backup power or continuous power role, and replace batteries, diesel generators or the grid for telecommunication logistics, transportation, and utility customers. Plug expects to support these products and customers with an ecosystem of vertically integrated products that produce, transport, store and handle, dispense, and use hydrogen for mobility and power applications.
Our current product and service portfolio includes:
GenDrive: GenDrive is our hydrogen fueled PEM fuel cell system, providing power to material handling electric vehicles (“EVs”), including Class 1, 2, 3 and 6 electric forklifts, automated guided vehicles, and ground support equipment.
GenSure: GenSure is our stationary fuel cell solution providing scalable, modular PEM fuel cell power to support the backup and grid-support power requirements of the telecommunications, transportation, and utility sectors; our GenSure High Power Fuel Cell Platform supports large scale stationary power and data center markets.
ProGen: ProGen is our fuel cell stack and engine technology currently used globally in mobility and stationary fuel cell systems, and as engines in electric delivery vans. This includes Plug’s membrane electrode assembly (“MEA”), a critical component of the fuel cell stack used in zero-emission fuel cell EV engines.
GenFuel: GenFuel is our liquid hydrogen fueling, delivery, generation, storage, and dispensing system.
GenCare: GenCare is our ongoing “Internet of Things”-based maintenance and on-site service program for GenDrive fuel cell systems, GenSure fuel cell systems, GenFuel hydrogen storage and dispensing products and ProGen fuel cell engines.
GenKey: GenKey is our vertically integrated “turn-key” solution combining either GenDrive or GenSure fuel cell power with GenFuel fuel and GenCare aftermarket service, offering complete simplicity to customers transitioning to fuel cell power.
Electrolyzers: The design and implementation of 5MW and 10MW electrolyzer systems that are modular, scalable hydrogen generators optimized for clean hydrogen production. Electrolyzers generate hydrogen from water using electricity and a special membrane and “green” hydrogen is generated by using renewable energy inputs, such as solar or wind power.
Liquefaction Systems: Plug’s 15 ton-per-day and 30 ton-per-day liquefiers are engineered for high efficiency, reliability, and operational flexibility — providing consistent liquid hydrogen to customers. This design increases plant reliability and availability while minimizing parasitic losses like heat leak and seal gas losses.
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Cryogenic Equipment: Engineered equipment including trailers and mobile storage equipment for the distribution of liquified hydrogen, oxygen, argon, nitrogen and other cryogenic gases.
Liquid Hydrogen: Liquid hydrogen provides an efficient fuel alternative to fossil-based energy. We produce liquid hydrogen through our electrolyzer systems and liquefaction systems. Liquid hydrogen supply will be used by customers in material handling operations, fuel cell electric vehicle fleets, and stationary power applications.
We provide our products and solutions worldwide through our direct sales force, and by leveraging relationships with original equipment manufacturers (“OEMs”) and their dealer networks. Plug is currently targeting Asia, Australia, Europe, Middle East and North America for expansion in adoption. The European Union has rolled out ambitious targets for the hydrogen economy, with the United Kingdom also taking steps in this direction, and Plug is seeking to execute on our strategy to become one of the European leaders in the hydrogen economy. This includes a targeted account strategy for material handling, securing strategic partnerships with European OEMs, energy companies, utility leaders and accelerating our electrolyzer business.
We manufacture our commercially viable products in Latham, New York; Rochester, New York; Slingerlands, New York; Houston, Texas; Lafayette, Indiana; and Spokane, Washington, and support liquid hydrogen production and logistics in Charleston, Tennessee and Kingsland, Georgia.
Results of Operations
Our primary sources of revenue are from sales of equipment, related infrastructure and other, services performed on fuel cell systems and related infrastructure, power purchase agreements, and fuel delivered to customers and related equipment. A certain portion of our sales result from acquisitions in legacy markets, which we are working to transition to renewable solutions. Revenue from sales of equipment, related infrastructure and other represents sales of our GenDrive units, GenSure stationary backup power units, cryogenic stationary and on road storage, hydrogen liquefaction systems, electrolyzers and hydrogen fueling infrastructure. Revenue from services performed on fuel cell systems and related infrastructure represents revenue earned on our service and maintenance contracts and sales of spare parts. Revenue from power purchase agreements primarily represent payments received from customers who make monthly payments to access the Company’s GenKey solution. Revenue associated with fuel delivered to customers and related equipment represents the sale of hydrogen to customers that has been purchased by the Company from a third party or generated at our hydrogen production plant.
Provision for Common Stock Warrants
On August 24, 2022, the Company issued to Amazon.com NV Investment Holdings LLC, a wholly owned subsidiary of Amazon, a warrant (the “2022 Amazon Warrant”) to acquire up to 16,000,000 shares of the Company’s common stock (the “2022 Amazon Warrant Shares”), subject to certain vesting events described below under “Common Stock Transactions – Amazon Transaction Agreement in 2022”.
In 2017, the Company issued a warrant to Walmart (the “Walmart Warrant”) to purchase up to 55,286,696 shares of the Company’s common stock (the “Walmart Shares”), subject to certain vesting events described below under “Common Stock Transactions – Walmart Transaction Agreement”. The Company recorded a portion of the estimated fair value of the warrants as a reduction of revenue based upon the projected number of shares of common stock expected to vest under the warrants, the proportion of purchases by Walmart and their affiliates within the period relative to the aggregate purchase levels required for vesting of the respective warrants, and the fair value of the warrants.
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The amount of provision for the Amazon and Walmart Warrants recorded as a (reduction)/increase to revenue during the three and nine months ended September 30, 2024 and 2023, respectively, is shown in the table below (in thousands):
Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | ||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Sales of equipment, related infrastructure and other | $ | (486) | $ | (765) | $ | (3,414) | $ | (1,891) | ||||
Services performed on fuel cell systems and related infrastructure |
| (631) |
| (268) |
| (1,610) |
| (953) | ||||
Power purchase agreements |
| (1,632) |
| 1,767 |
| (4,419) |
| (4,635) | ||||
Fuel delivered to customers and related equipment |
| (3,218) |
| 831 |
| (6,851) |
| (5,258) | ||||
Total | $ | (5,967) | $ | 1,565 | $ | (16,294) | $ | (12,737) | ||||
Net revenue, cost of revenue, gross profit/(loss) and gross margin/(loss) for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Three months ended | Nine months ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
Cost of |
| Gross |
| Gross | Cost of |
| Gross |
| Gross | ||||||||||||||
Net Revenue | Revenue | Profit/(Loss) | Margin |
| Net Revenue | Revenue | Profit/(Loss) | Margin/(Loss) |
| ||||||||||||||
For the period ended September 30, 2024: | |||||||||||||||||||||||
Sales of equipment, related infrastructure and other | $ | 107,141 | $ | 149,912 | $ | (42,771) |
| (39.9) | % | $ | 252,224 | $ | 414,948 | $ | (162,724) |
| (64.5) | % | |||||
Services performed on fuel cell systems and related infrastructure |
| 14,148 |
| 9,086 |
| 5,062 |
| 35.8 | % |
| 40,205 |
| 35,773 |
| 4,432 |
| 11.0 | % | |||||
Provision for loss contracts related to service | — | 6,036 | (6,036) | N/A | — | 38,265 | (38,265) | N/A | |||||||||||||||
Power purchase agreements |
| 20,459 |
| 51,782 |
| (31,323) |
| (153.1) | % |
| 58,437 |
| 161,322 |
| (102,885) |
| (176.1) | % | |||||
Fuel delivered to customers and related equipment |
| 29,791 |
| 55,538 |
| (25,747) |
| (86.4) | % |
| 77,964 |
| 172,428 |
| (94,464) |
| (121.2) | % | |||||
Other |
| 2,191 |
| 1,401 |
| 790 |
| 36.1 | % |
| 8,514 |
| 4,963 |
| 3,551 |
| 41.7 | % | |||||
Total | $ | 173,730 | $ | 273,755 | $ | (100,025) |
| (57.6) | % | $ | 437,344 | $ | 827,699 | $ | (390,355) |
| (89.3) | % | |||||
For the period ended September 30, 2023: | |||||||||||||||||||||||
Sales of equipment, related infrastructure and other | $ | 145,130 | $ | 158,989 | $ | (13,859) |
| (9.5) | % | $ | 543,510 | $ | 504,717 | $ | 38,793 |
| 7.1 | % | |||||
Services performed on fuel cell systems and related infrastructure |
| 9,290 |
| 17,916 |
| (8,626) |
| (92.9) | % |
| 27,088 |
| 53,586 |
| (26,498) |
| (97.8) | % | |||||
Provision for loss contracts related to service | — | 41,581 | (41,581) | N/A | — | 55,801 | (55,801) | N/A | |||||||||||||||
Power purchase agreements |
| 20,068 |
| 56,981 |
| (36,913) |
| (183.9) | % |
| 44,135 |
| 157,773 |
| (113,638) |
| (257.5) | % | |||||
Fuel delivered to customers and related equipment |
| 19,371 |
| 59,012 |
| (39,641) |
| (204.6) | % |
| 47,391 |
| 177,963 |
| (130,572) |
| (275.5) | % | |||||
Other |
| 4,852 |
| 2,197 |
| 2,655 |
| 54.7 | % |
| 7,055 |
| 4,843 |
| 2,212 |
| 31.4 | % | |||||
Total | $ | 198,711 | $ | 336,676 | $ | (137,965) |
| (69.4) | % | $ | 669,179 | $ | 954,683 | $ | (285,504) |
| (42.7) | % | |||||
Net Revenue
Revenue – sales of equipment, related infrastructure and other. Revenue from sales of equipment, related infrastructure and other represents sales of our GenDrive units, GenSure stationary backup power units, cryogenic stationary and on road storage, hydrogen liquefaction systems, electrolyzers and hydrogen fueling infrastructure referred to at the site level as hydrogen installations. Revenue from sales of equipment, related infrastructure and other for the three months ended September 30, 2024 decreased $38.0 million, or 26.2%, to $107.1 million from $145.1 million for the three months ended September 30, 2023. Primarily contributing to the decrease in revenue was a decrease in sales of hydrogen infrastructure, sales of cryogenic equipment and liquefiers and sales of fuel cell systems, partially offset by an increase in sales of electrolyzers. The decrease in revenue from sales of hydrogen infrastructure of $26.4 million was due to three hydrogen site installations for the three months ended September 30, 2024 compared to ten for the three months ended September 30, 2023. Additionally, revenue from sales of cryogenic equipment and liquefiers decreased $13.4 million for the three months ended September 30, 2024 primarily due to product mix with respect to cryogenic equipment and fewer projects and a slower rate of progress on existing liquefier projects as they near completion compared to the three months ended September 30, 2023. The decrease in revenue related to sales of fuel cell systems of $29.5 million was due primarily to a decrease in volume of GenDrive units sold, with 522 units sold for the three months ended September 30, 2024 compared to 1,452 units sold for the three months ended September 30, 2023. Also, the pace of development of the
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hydrogen economy has been slower than anticipated and has impacted hydrogen equipment deployments. Partially offsetting these decreases, revenue from sales of electrolyzers increased $31.2 million, primarily due to an increase in electrolyzer systems for which revenue was recognized, with 16 systems sold for the three months ended September 30, 2024 compared to one system sold for the three months ended September 30, 2023.
Revenue from sales of equipment, related infrastructure and other for the nine months ended September 30, 2024 decreased $291.3 million, or 53.6%, to $252.2 million from $543.5 million for the nine months ended September 30, 2023. Primarily contributing to the decrease in revenue was a decrease in sales of hydrogen infrastructure, sales of cryogenic equipment and liquefiers and sales of fuel cell systems, partially offset by an increase in sales of electrolyzers. The decrease in sales of hydrogen infrastructure revenue of $108.3 million was due to a decrease in volume with 11 hydrogen site installations for the nine months ended September 30, 2024 compared to 41 for the nine months ended September 30, 2023. Additionally, revenue from sales of cryogenic equipment and liquefiers decreased $77.2 million for the nine months ended September 30, 2024 primarily due to product mix with respect to cryogenic equipment, fewer projects and a slower rate of progress on existing liquefier projects as they near completion compared to the nine months ended September 30, 2023. The decrease in revenue related to sales of fuel cell systems of $98.4 million was primarily due to a decrease in volume of GenDrive units sold, with 2,545 units sold for the nine months ended September 30, 2024 compared to 5,167 units sold for the nine months ended September 30, 2023. Additionally, there was a decrease in revenue of $7.9 million related to decreased sales of engineered equipment from the Frames acquisition, for which sales are not expected to continue beyond current commitments. Furthermore, there was an increase in the provision for common stock warrants recorded as a reduction of revenue to $3.4 million for the nine months ended September 30, 2024 compared to a provision of $1.9 million for the nine months ended September 30, 2023. Also, the pace of development of the hydrogen economy has been slower than anticipated and has impacted hydrogen equipment deployments. Partially offsetting the decrease in revenue was an increase in revenue from sales of electrolyzers of $0.3 million primarily due to an increase in electrolyzer systems for which revenue was recognized discussed above offset by a decrease in electrolyzer stack sales during the first half of 2024.
Revenue – services performed on fuel cell systems and related infrastructure. Revenue from services performed on fuel cell systems and related infrastructure represents revenue earned on our service and maintenance contracts and sales of spare parts. Revenue from services performed on fuel cell systems and related infrastructure for the three months ended September 30, 2024 increased $4.8 million, or 51.6%, to $14.1 million from $9.3 million for the three months ended September 30, 2023. The increase in revenue from services performed on fuel cell systems and related infrastructure was primarily related to the increase in number of units in service, with the number of GenDrive units under maintenance contracts during the three months ended September 30, 2024 of 22,235 compared to 20,417 for the three months ended September 30, 2023, coupled with an increase in contract rates negotiated with certain customers.
Revenue from services performed on fuel cell systems and related infrastructure for the nine months ended September 30, 2024 increased $13.1 million, or 48.3%, to $40.2 million from $27.1 million for the nine months ended September 30, 2023. The increase in revenue from services performed on fuel cell systems and related infrastructure was primarily related to the increase in number of units in service during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, as discussed above, coupled with an increase in contract rates negotiated with certain customers.
Revenue – power purchase agreements. Revenue from Power Purchase Agreements (“PPAs”) represents payments received from customers for power generated through the provision of equipment and service. Revenue from PPAs for the three months ended September 30, 2024 increased $0.4 million, or 2.0%, to $20.5 million from $20.1 million for the three months ended September 30, 2023. The increase in revenue was a result of an increase in the number of units and customer sites party to these agreements as well as an increase in pricing rates, partially offset by an increase in the provision for common stock warrants. There were 31,715 GenDrive units under PPA arrangements as of September 30, 2024 compared to 31,484 as of September 30, 2023. In addition, there were 154 hydrogen sites under PPA arrangements as of September 30, 2024 compared to 138 as of September 30, 2023. Furthermore, pricing rates were favorable in the third quarter of 2024 compared to the third quarter of 2023. Offsetting the increase in revenue was an increase in the provision for common stock warrants recorded as a reduction of revenue, which increased to $1.6 million for the three months ended September 30, 2024 compared to a negative provision of $1.8 million for the three months ended September 30, 2023.
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Revenue from PPAs for the nine months ended September 30, 2024 increased $14.3 million, or 32.4%, to $58.4 million from $44.1 million for the nine months ended September 30, 2023. The increase in revenue was a result of an increase in the number of units and customer sites party to these agreements, as discussed above, as well as more favorable pricing rates during the first three quarters of 2024 compared to the first three quarters of 2023. Finally, the provision for common stock warrants recorded as a reduction of revenue was relatively flat, decreasing to $4.4 million for the nine months ended September 30, 2024 compared to $4.6 million for the nine months ended September 30, 2023.
Revenue – fuel delivered to customers and related equipment. Revenue associated with fuel and related equipment delivered to customers represents the sale of hydrogen that has been purchased by the Company from a third party or generated at our hydrogen production plant. Revenue associated with fuel delivered to customers for the three months ended September 30, 2024 increased $10.4 million, or 53.6%, to $29.8 million from $19.4 million for the three months ended September 30, 2023. The increase in revenue was primarily due to an increase in the number of sites with fuel contracts, with 260 sites receiving fuel delivery as of September 30, 2024 compared to 237 sites as of September 30, 2023. Furthermore, increased fuel prices were negotiated with certain customers during the second quarter of 2024. Partially offsetting the increase in revenue was an increase in the provision for common stock warrants recorded as a reduction of revenue, which increased to $3.2 million for the three months ended September 30, 2024 compared to a negative provision of $0.8 million for the three months ended September 30, 2023.
Revenue associated with fuel delivered to customers for the nine months ended September 30, 2024 increased $30.6 million, or 64.6%, to $78.0 million from $47.4 million for the nine months ended September 30, 2023. The increase in revenue was primarily due to an increase in the number of sites with fuel contracts. Furthermore, increased fuel prices were negotiated with certain customers in the second quarter of 2024. Partially offsetting the decrease, there was an increase in the provision for common stock warrants recorded as a reduction of revenue to $6.9 million for the nine months ended September 30, 2024 compared to $5.3 million for the nine months ended September 30, 2023.
Cost of Revenue
Cost of revenue – sales of equipment, related infrastructure and other. Cost of revenue from sales of equipment, related infrastructure and other includes direct materials, labor costs, and allocated overhead costs related to the manufacture of our fuel cells such as GenDrive units and GenSure stationary back-up power units, cryogenic stationary and on road storage, and electrolyzers, as well as hydrogen fueling infrastructure referred to at the site level as hydrogen installations. Cost of revenue from sales of equipment, related infrastructure and other for the three months ended September 30, 2024 decreased $9.1 million, or 5.7%, to $149.9 million from $159.0 million for the three months ended September 30, 2023. Primarily contributing to the decrease in cost of revenue was a decrease in sales of hydrogen infrastructure, sales of cryogenic equipment and liquefiers, sales of fuel cell systems and inventory valuation adjustments, partially offset by an increase in sales of electrolyzers.
The cost of revenue related to sales of hydrogen infrastructure decreased $13.8 million primarily due to the decrease in the number of hydrogen site installations, with three hydrogen site installations for the three months ended September 30, 2024 compared to ten for the three months ended September 30, 2023. Included in cost of revenue related to sales of hydrogen infrastructure were inventory valuation adjustments of $1.3 million for the three months ended September 30, 2024 compared to $0.1 million for the three months ended September 30, 2023.
The decrease in cost of revenue related to sales of cryogenic equipment and liquefiers of $6.8 million for the three months ended September 30, 2024 was primarily due to product mix with respect to cryogenic equipment, fewer projects and a slower rate of progress on existing liquefier projects as they near completion compared to the three months ended September 30, 2023. Included in cost of revenue related to sales of cryogenic equipment and liquefiers were inventory valuation adjustments of $1.1 million for the three months ended September 30, 2024 compared to $0.2 million for the three months ended September 30, 2023.
Cost of revenue related to sales of fuel cell systems decreased by $19.8 million primarily due to a decrease in volume of GenDrive units sold, with 522 units sold for the three months ended September 30, 2024 compared to 1,452
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units sold for the three months ended September 30, 2023. Included in cost of revenue related to sales of fuel cell systems were inventory valuation adjustments of $3.4 million for the three months ended September 30, 2024 compared to $3.3 million for the three months ended September 30, 2023.
Additionally, there was a decrease in cost of revenue of $3.1 million related to a decrease in sales of engineered equipment from the Frames acquisition, for which sales are not expected to continue beyond current commitments.
Cost of revenue related to sales of electrolyzer stacks and systems increased by $34.4 million, which was primarily due to an increase in electrolyzer systems for which revenue was recognized, with 16 systems sold for the three months ended September 30, 2024 compared to one system sold for the three months ended September 30, 2023. Included in cost of revenue related to sales of electrolyzer stacks and systems were inventory valuation adjustments of $6.5 million for the three months ended September 30, 2024 compared to $16.5 million for the three months ended September 30, 2023. The decrease in inventory valuation adjustments during the three months ended September 30, 2024 were primarily related to higher sales prices on recently signed contracts with customers resulting in decreased lower of cost or net realizable valuation adjustments.
Gross loss generated from sales of equipment, related infrastructure and other increased to (39.9%) for the three months ended September 30, 2024 compared to (9.5%) for the three months ended September 30, 2023. The increase in gross loss was primarily due to customer mix, lower margins on new product offerings and decline in volume which impacted leveraging of labor and overhead in the third quarter of 2024. The increase in gross loss was partially offset by the decrease in inventory valuation adjustments of described above.
Cost of revenue from sales of equipment, related infrastructure and other for the nine months ended September 30, 2024 decreased $89.8 million, or 17.8%, to $414.9 million from $504.7 million for the nine months ended September 30, 2023. Primarily contributing to the decrease in cost of revenue was a decrease in sales of hydrogen infrastructure, sales of cryogenic equipment and liquefiers, sales of fuel cell systems and inventory valuation adjustments, partially offset by an increase in sales of electrolyzers.
The cost of revenue related to sales of hydrogen infrastructure decreased $55.9 million due to the decrease in the number of hydrogen site installations, with 11 hydrogen site installations for the nine months ended September 30, 2024 compared to 41 for the nine months ended September 30, 2023. Included in cost of revenue related to sales of hydrogen infrastructure were inventory valuation adjustments of $4.2 million for the nine months ended September 30, 2024 compared to $1.3 million for the nine months ended September 30, 2023.
The decrease in cost of revenue related to sales of cryogenic equipment and liquefiers of $50.0 million for the nine months ended September 30, 2024 was primarily due to product mix with respect to cryogenic equipment and fewer projects and a slower rate of progress on existing liquefier projects as they near completion compared to the nine months ended September 30, 2023. Included in cost of revenue related to sales of cryogenic equipment and liquefiers were inventory valuation adjustments of $3.2 million for the nine months ended September 30, 2024 compared to $1.1 million for the nine months ended September 30, 2023.
Cost of revenue related to sales of fuel cell systems decreased $20.4 million primarily due to a decrease in the volume of GenDrive units sold for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, with 2,545 units sold for the nine months ended September 30, 2024 compared to 5,167 units sold for the nine months ended September 30, 2023. Included in cost of revenue related to sales of fuel cell systems were inventory valuation adjustments of $29.1 million for the nine months ended September 30, 2024 compared to $5.8 million for the nine months ended September 30, 2023. The increase in inventory valuation adjustments were primarily related to lower sales volume at lower sales prices than previously experienced which resulted in higher lower of cost or realizable valuation adjustments.
Additionally, there was a decrease in cost of revenue of $8.7 million related to a decrease in sales of engineered equipment from the Frames acquisition, for which sales are not expected to continue beyond current commitments.
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Partially offsetting these decreases was an increase in cost of revenue related to sales of electrolyzer stacks and systems of $45.2 million, primarily due to an increase in electrolyzer systems for which revenue was recognized, with 16 systems sold for the nine months ended September 30, 2024 compared to two systems sold for the nine months ended September 30, 2023. Included in cost of revenue related to sales of electrolyzer stacks and systems were inventory valuation adjustments of $27.9 million for the nine months ended September 30, 2024 compared to $19.9 million for the nine months ended September 30, 2023. The increase in inventory valuation adjustments were primarily related to additional costs incurred during the nine months ended September 30, 2024 as projects neared completion requiring additional lower of cost or net realizable valuation adjustments.
Gross loss generated from sales of equipment, related infrastructure and other was (64.5%) for the nine months ended September 30, 2024 compared to a gross margin of 7.1% for the nine months ended September 30, 2023. The decrease from gross margin to gross loss was primarily due to the inventory valuation adjustments described above, customer mix, lower margins on new product offerings and decline in volume which impacted leveraging of labor and overhead in the first three quarters of 2024.
Cost of revenue – services performed on fuel cell systems and related infrastructure. Cost of revenue from services performed on fuel cell systems and related infrastructure includes the labor, material costs and allocated overhead costs incurred for our product service and hydrogen site maintenance contracts and spare parts. Cost of revenue from services performed on fuel cell systems and related infrastructure for the three months ended September 30, 2024 decreased $8.8 million, or 49.2%, to $9.1 million from $17.9 million for the three months ended September 30, 2023. The decrease in cost of revenue was primarily due to an increase in the release of the loss accrual, with a release of $13.9 million during the three months ended September 30, 2024 compared to a release of $6.5 million during the three months ended September 30, 2023. Included in cost of revenue related to services performed on fuel cell systems and related infrastructure were inventory valuation adjustments of $0.1 million for the three months ended September 30, 2024 compared to $0.2 million for the three months ended September 30, 2023. Gross margin increased to 35.8% for the three months ended September 30, 2024 compared to gross loss of (92.9%) for the three months ended September 30, 2023. The increase in gross margin was primarily due to an increase in negotiated contract rates discussed above, as well as an increase in the release of the loss accrual during the three months ended September 30, 2024.
Cost of revenue from services performed on fuel cell systems and related infrastructure for the nine months ended September 30, 2024 decreased $17.8 million, or 33.2%, to $35.8 million from $53.6 million for the nine months ended September 30, 2023. The decrease in cost of revenue was primarily due to an increase in the release of the loss accrual, with a release of $38.8 million during the nine months ended September 30, 2024 compared to a release of $19.9 million during the nine months ended September 30, 2023. Included in cost of revenue related to services performed on fuel cell systems and related infrastructure were inventory valuation adjustments of $0.2 million for the nine months ended September 30, 2024 compared to $0.4 million for the nine months ended September 30, 2023. Gross margin increased to 11.0% for the nine months ended September 30, 2024 compared to gross loss of (97.8%) for the nine months ended September 30, 2023. The increase in gross margin was primarily due to an increase in negotiated contract rates discussed above, as well as an increase in the release of the loss accrual during the nine months ended September 30, 2024.
Cost of revenue – provision for loss contracts related to service. The Company also recorded a provision for loss contracts related to service of $6.0 million for the three months ended September 30, 2024 compared to $41.6 million for the three months ended September 30, 2023. The Company decreased the provision primarily due to relatively flat costs of labor, parts and related overhead coupled with an increase in negotiated contract rates with certain customers.
The Company recorded a provision for loss contracts related to service of $38.3 million for the nine months ended September 30, 2024 compared to $55.8 million for the nine months ended September 30, 2023. The Company decreased the provision primarily due to relatively flat costs of labor, parts and related overhead coupled with an increase in negotiated contract rates with certain customers.
Cost of revenue – power purchase agreements. Cost of revenue from PPAs includes depreciation of assets utilized and service costs to fulfill PPA obligations and interest costs associated with certain financial institutions for leased equipment. Cost of revenue from PPAs for the three months ended September 30, 2024 decreased $5.2 million, or 9.1%,
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to $51.8 million from $57.0 million for the three months ended September 30, 2023. The decrease in cost was primarily due to a decrease in cost of parts. Gross loss decreased to (153.1%) for the three months ended September 30, 2024 compared to (183.9%) for the three months ended September 30, 2023. The decrease in gross loss was primarily due to improved pricing and a reduction in cost of parts, partially offset by an increase in provision for common stock warrants of $3.4 million as discussed above.
Cost of revenue from PPAs for the nine months ended September 30, 2024 increased $3.5 million, or 2.2%, to $161.3 million from $157.8 million for the nine months ended September 30, 2023. The increase in cost was primarily a result of an increase in units and sites under PPA contracts. Gross loss decreased to (176.1%) for the nine months ended September 30, 2024 compared to (257.5%) for the nine months ended September 30, 2023. The decrease in gross loss was primarily due to improved pricing which began in the first quarter of 2024.
Cost of revenue – fuel delivered to customers and related equipment. Cost of revenue from fuel delivered to customers and related equipment represents the purchase of hydrogen from suppliers and internally produced hydrogen that is ultimately sold to customers. Cost of revenue from fuel delivered to customers for the three months ended September 30, 2024 decreased $3.5 million, or 5.9%, to $55.5 million from $59.0 million for the three months ended September 30, 2023. The decrease was primarily due to lower costs of purchased fuel, an increase in fuel internally produced by the Company, which is inherently lower in cost, as well as a recognition of the clean hydrogen production tax credit (“PTC”) of $1.6 million. Included in cost of revenue related to fuel delivered to customers and related equipment were inventory valuation adjustments of $0.4 million for the three months ended September 30, 2024 compared to $2.0 million for the three months ended September 30, 2023. Gross loss decreased to (86.4%) during the three months ended September 30, 2024 compared to (204.6%) during the three months ended September 30, 2023. The decrease in gross loss was primarily due to favorable fuel rates negotiated with certain customers, lower costs of purchased fuel, an increase in fuel internally produced by the Company, the decrease in inventory valuation adjustments described above and recognition of the PTC.
Cost of revenue from fuel delivered to customers for the nine months ended September 30, 2024 decreased $5.6 million, or 3.1%, to $172.4 million from $178.0 million for the nine months ended September 30, 2023. The decrease was primarily due to lower costs of purchased fuel, an increase in fuel internally produced by the Company, which is inherently lower in cost, as well as a recognition of the PTC of $2.9 million. Included in cost of revenue related to fuel delivered to customers and related equipment were inventory valuation adjustments of $3.1 million for the three months ended September 30, 2024 compared to $5.3 million for the three months ended September 30, 2023. Gross loss decreased to (121.2%) during the nine months ended September 30, 2024 compared to (275.5%) during the nine months ended September 30, 2023. The decrease in gross loss was primarily due to favorable fuel rates negotiated with certain customers, lower costs of purchased fuel, an increase in fuel internally produced by the Company, the decrease in inventory valuation adjustments described above and recognition of the PTC.
Expenses
Research and development. Research and development expenses include: materials to build development and prototype units, cash and non-cash stock compensation and benefits for the engineering and related staff, expenses for contract engineers, fees paid to consultants for services provided, materials and supplies consumed, facility related costs such as computer and network services, and other general overhead costs associated with our research and development activities. Research and development expense for the three months ended September 30, 2024 decreased $8.0 million, or 28.9%, to $19.7 million from $27.7 million for the three months ended September 30, 2023. The decrease was primarily related to headcount reductions.
Research and development expense for the nine months ended September 30, 2024 decreased $19.5 million, or 23.4%, to $63.9 million from $83.4 million for the nine months ended September 30, 2023. The decrease was primarily related to headcount reductions as well as a decrease in component materials which are used for testing, prototypes and proof of concept.
Selling, general and administrative. Selling, general and administrative expenses include cash and non-cash stock compensation, benefits, amortization of intangible assets and related costs in support of our general corporate functions,
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including general management, finance and accounting, human resources, selling and marketing, information technology and legal services. Selling, general and administrative expenses for the three months ended September 30, 2024 decreased $13.9 million, or 13.2%, to $91.6 million from $105.5 million for the three months ended September 30, 2023. The decrease was primarily due to a decrease in stock compensation as certain market-condition awards near the end of their vesting period as well as stock compensation forfeitures.
Selling, general and administrative expenses for the nine months ended September 30, 2024 decreased $55.9 million, or 18.0%, to $254.7 million from $310.6 million for the nine months ended September 30, 2023. The decrease was primarily due to a decrease in stock compensation expense related to stock compensation forfeitures resulting from the Restructuring Plan announced in February 2024 as well as certain market-condition awards nearing the end of their vesting period.
Restructuring. Expenses related to the Restructuring Plan for the three months ended September 30, 2024 was $0.5 million. The increase was due to severance and benefits related to the Restructuring Plan the Company announced in February 2024.
Expenses related to the Restructuring Plan for the nine months ended September 30, 2024 was $8.2 million. The increase was due to severance and benefits related to the Restructuring Plan the Company announced in February 2024.
Impairment. Impairment for the three months ended September 30, 2024 increased $3.5 million, or 500.0%, to $4.2 million from $0.7 million for the three months ended September 30, 2023. The increase was primarily related to the Company recording a higher impairment charge on long-lived assets due to the cancellation of certain projects during the three months ended September 30, 2024.
Impairment for the nine months ended September 30, 2024 decreased $3.3 million, or 28.2%, to $8.4 million from $11.7 million for the nine months ended September 30, 2023. The decrease was primarily related to the Company recording a lower impairment charge on long-lived assets during the nine months ended September 30, 2024, and due to the cancellation of a specific contract during the nine months ended September 30, 2023.
Change in fair value of contingent consideration. The change in fair value of contingent consideration is related to earnouts for the Joule Processing LLC (“Joule”) and Frames Holding B.V. (“Frames”) acquisitions. The change in fair value of contingent consideration for the three months ended September 30, 2024 and 2023 was $0.1 million and $2.2 million, respectively. The decrease was primarily due to the Giner ELX, Inc. (“Giner”) and Universal Hydrogen Group Inc. (“UHG”) earn-outs that were still outstanding during the three months ended September 30, 2023 but subsequently settled during the second quarter of 2024. In addition, the fair value of contingent consideration for Joule’s earn-out increased by $2.9 million during the three months ended September 30, 2023 due to passage of time.
The change in fair value of contingent consideration for the nine months ended September 30, 2024 and 2023 was ($5.3) million and $26.3 million, respectively. The decrease was primarily due to changes in assumptions related to future earn-out payments due to renegotiated agreements during the first quarter of 2024 as well as the settlement of the UHG and Giner earn-outs.
Interest income. Interest income primarily consists of income generated by our investment holdings, restricted cash escrow accounts, and money market accounts. Interest income for the three months ended September 30, 2024 decreased $3.0 million compared to the three months ended September 30, 2023. The decrease during the three months ended September 30, 2024 compared to September 30, 2023 was primarily due to the maturities and sale of the Company’s available-for-sale portfolio of higher-yielding U.S. treasury securities during 2023.
Interest income for the nine months ended September 30, 2024 decreased $19.9 million compared to the nine months ended September 30, 2023. The decrease during the nine months ended September 30, 2024 compared to September 30, 2023 was primarily due to the maturities and sale of the Company’s available-for-sale portfolio of higher-yielding U.S. treasury securities during 2023.
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Interest expense. Interest expense consists of interest expense related to our long-term debt, convertible senior notes, obligations under finance leases and our finance obligations. Interest expense for the three months ended September 30, 2024 decreased $2.7 million compared to the three months ended September 30, 2023 primarily due to an increase in capitalized interest during the third quarter of 2024.
Interest expense for the nine months ended September 30, 2024 decreased $3.7 million compared to the nine months ended September 30, 2023 primarily due to an increase in capitalized interest during the second and third quarters of 2024.
Other income/(expense), net. Other income/(expense), net primarily consists of gains and losses related to energy contracts and foreign currency. Other income/(expense), net for the three months ended September 30, 2024 increased $10.5 million compared to the three months ended September 30, 2023. The increase was primarily due to foreign currency gains as well as gains related to energy contracts.
Other income/(expense), net for the nine months ended September 30, 2024 increased $4.3 million compared to the nine months ended September 30, 2023. The increase was primarily due to gains related to energy contracts, partially offset by overall foreign currency losses for the nine months ended September 30, 2024.
Other-than-temporary impairment of available-for-sale securities. For the three and nine months ended September 30, 2023, the Company recorded an other-than-temporary impairment charge of $10.8 million on the Company's available-for-sale securities due to a change in the Company's ability and intent to retain the investments for a period of time sufficient to allow for any anticipated recovery in the fair value. The other-than-temporary charge was realized when the Company sold its remaining available-for-sale securities and equity securities during the fourth quarter of 2023. There was no such charge recorded in the three and nine months ended September 30, 2024.
Change in fair value of equity securities. Change in fair value of equity securities consists of the changes in fair value for equity securities from the purchase date to the end of the period. The change in fair value of equity securities was $0 for the three months ended September 30, 2024 compared to a gain of $70 thousand for the three months ended September 30, 2023. The decrease in the change in fair value of equity securities is due to the Company selling its remaining equity securities during the fourth quarter of 2023.
The change in fair value of equity securities was $0 for the nine months ended September 30, 2024 compared to a gain of $9.0 million for the nine months ended September 30, 2023. The decrease in the change in fair value of equity securities is due to the Company selling its remaining equity securities during the fourth quarter of 2023.
Loss on equity method investments. Loss on equity method investments consists of our interest in HyVia, which is our 50/50 joint venture with Renault, AccionaPlug, which is our 50/50 joint venture with Acciona, SK Plug Hyverse, which is our 49/51 joint venture with SK E&S, and Clean H2 Infra Fund. For the three months ended September 30, 2024, the Company recorded a loss of $8.7 million on equity method investments compared to a loss of $7.0 million for the three months ended September 30, 2023. These losses are driven from the start-up activities for commercial and production operations of the aforementioned investments.
For the nine months ended September 30, 2024, the Company recorded a loss of $29.0 million on equity method investments compared to a loss of $20.0 million for the nine months ended September 30, 2023. These losses are driven from the start-up activities for commercial and production operations of the aforementioned investments.
Loss on extinguishment of convertible senior notes. Loss on extinguishment of convertible senior notes arises from the difference between the net carrying amount of the Company’s Convertible Senior Notes and the fair value of the assets transferred to extinguish the Convertible Senior Notes. For the three months ended September 30, 2024 and September 30, 2023, the Company did not record a loss on extinguishment of convertible senior notes.
For the nine months ended September 30, 2024, the Company recorded a loss of $14.0 million on extinguishment of convertible senior notes. These losses are driven from the exchange of $138.8 million in aggregate principal amount of
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the Company’s 3.50% Convertible Senior Notes for $140.4 million in aggregate principal amount of the Company’s new 7.00% Convertible Senior Notes during the first quarter of 2024.
Income Taxes
The Company recorded $0.1 million of income tax expense and $4.7 million of income tax benefit for the three months ended September 30, 2024 and 2023, respectively. The Company recorded $0.1 million of income tax benefit and $6.9 million of income tax benefit for the nine months ended September 30, 2024 and 2023, respectively. The income tax benefit for the nine months ended September 30, 2024 was due to an incremental change to the valuation allowance recorded in foreign jurisdictions. The Company has not changed its overall conclusion with respect to the need for a valuation allowance against its domestic net deferred tax assets, which remain fully reserved, and its valuation allowances recorded in foreign jurisdictions.
The domestic net deferred tax asset generated from the Company’s net operating loss has been offset by a full valuation allowance because it is more likely than not that the tax benefits of the net operating loss carryforward will not be realized. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense.
The Organization for Economic Co-operation and Development Inclusive Framework on Base Erosion and Profit Shifting has proposed a global minimum corporate tax rate of 15% on multi-national corporations, commonly referred to as the Pillar Two rules that has been agreed upon in principle by over 140 countries. While the United States has not adopted the Pillar Two rules, numerous foreign countries have enacted legislation to implement the Pillar Two rules, effective beginning January 1, 2024, or are expected to enact similar legislation. As of September 30, 2024, the Company did not meet the consolidated revenue threshold and is not subject to the GloBE Rules under Pillar Two. The Company will continue to monitor the implementation of rules in the jurisdictions in which it operates.
Liquidity and Capital Resources
As of September 30, 2024 and December 31, 2023, the Company had $93.9 million and $135.0 million, respectively, of cash and cash equivalents and $906.3 million of restricted cash as of September 30, 2024.
The Company has continued to experience negative cash flows from operations and net losses. The Company incurred net losses of $769.3 million and $726.4 million for the nine months ended September 30, 2024 and 2023, respectively, and had an accumulated deficit of $5.3 billion as of September 30, 2024.
A summary of our consolidated sources and uses of cash, cash equivalents and restricted cash was as follows (in thousands):
Nine months ended | |||||
September 30, 2024 | September 30, 2023 | ||||
Net cash (used in) provided by: | |||||
Operating activities | $ | (597,402) | $ | (863,919) | |
Investing activities | (358,529) | 460,488 | |||
Financing activities | 779,175 | 14,447 | |||
$ | (176,756) | $ | (388,984) | ||
Operating Activities
The net cash used in operating activities for the nine months ended September 30, 2024 and 2023 was $597.4 million and $863.9 million, respectively. This decrease in net cash used in operating activities was primarily due to cash inflows related to the Company’s accounts receivables and inventory, partially offset by an increase in net loss, a decrease in accounts payable, accrued expenses, and other liabilities and a decrease in deferred revenue and other contract liabilities.
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The Company’s working capital was $847.1 million as of September 30, 2024, which included unrestricted cash and cash equivalents of $93.9 million.
Investing Activities
The net cash (used in)/provided by investing activities for the nine months ended September 30, 2024 and 2023 was ($358.5) million and $460.5 million, respectively. The change from cash inflow to cash outflow from investing activities was primarily due to a decrease in proceeds from maturities of available-for-sale securities during the nine months ended September 30, 2024 as the Company no longer holds available-for-sale securities.
Financing Activities
The net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 was $779.2 million and $14.4 million, respectively. The increase in cash provided by financing activities was primarily driven by proceeds from the At Market Issuance Sales Agreement, as amended (as described below), with B. Riley Securities, Inc. (“B. Riley”) during the nine months ended September 30, 2024, partially offset by a decrease in proceeds from finance obligations.
The Company’s working capital was $847.1 million as of September 30, 2024, which included unrestricted cash and cash equivalents of $93.9 million and restricted cash of $906.3 million. On January 17, 2024, the Company entered into the At Market Issuance Sales Agreement (the “Original ATM Agreement”) with B. Riley pursuant to which the Company may, from time to time, offer and sell through or to B. Riley, as sales agent or principal, shares of the Company’s common stock, having an aggregate gross sales price of up to $1.0 billion. As of February 23, 2024, the Company had $697.9 million remaining authorized for issuance under the Original ATM Agreement. On February 23, 2024, the Company and B. Riley entered into Amendment No. 1 to the Original ATM Agreement (“Amendment No. 1” and, together with the Original ATM Agreement, the “ATM Agreement”) to increase the aggregate gross sales price of shares of the Company’s common stock available for future issuance under the Original ATM Agreement to $1.0 billion. Under the ATM Agreement, the Company has the right at its sole discretion to direct B. Riley to act on a principal basis and purchase directly from the Company up to $11.0 million of shares of its common stock on any trading day (the “Maximum Commitment Advance Purchase Amount”) if the Company’s market capitalization is more than $1.0 billion (or up to $10.0 million if the Company’s market capitalization is less than $1.0 billion) and up to $55.0 million of shares in any calendar week (the “Maximum Commitment Advance Purchase Amount Cap”) if the Company’s market capitalization is more than $1.0 billion (or up to $30.0 million if the Company’s market capitalization is less than $1.0 billion). As of November 7, 2024, the Company had offered and sold 219,835,221 shares of common stock having an aggregate gross sales price of approximately $677.2 million under the ATM Agreement and shares of the Company’s common stock having an aggregate gross sales price of approximately $624.8 million remained available for issuance and sale under the ATM Agreement.
On November 7, 2024, the Company entered into Amendment No. 2 to the Original ATM Agreement (“Amendment No. 2” and together with the ATM Agreement, the “Amended ATM Agreement”) with B. Riley. Amendment No. 2 increased the aggregate gross sales price of the Company’s common stock the Company may offer and sell pursuant to the Amended ATM Agreement by approximately $375.2 million to $1.0 billion. From and after November 7, 2024, through and including February 7, 2025, the Company has the right at its sole discretion to direct B. Riley to act on a principal basis and purchase from the Company up to the Maximum Commitment Advance Purchase Amount of $11.0 million and up to the Maximum Commitment Advance Purchase Amount Cap of $55.0 million (including any shares sold by B. Riley in agency transactions) in any calendar week. If the Company’s market capitalization is less than $1.0 billion on and after February 8, 2025, the Maximum Commitment Advance Purchase Amount shall be decreased to $10.0 million and the Maximum Commitment Advance Purchase Amount Cap shall be decreased to $30.0 million.
On November 11, 2024, the Company entered into a Debenture Purchase Agreement with YA II PN, Ltd. (the “Investor”) under which the Company agreed to sell and issue to the Investor an unsecured convertible debenture in aggregate principal amount of $200.0 million (the “Convertible Debenture”) in exchange for the payment by the Investor to the Company of $190.0 million. The Company expects to close the issuance of the Convertible Debenture on or about November 12, 2024, subject to customary closing conditions. For more information, see Note 24, “Subsequent Events”.
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On July 22, 2024, the Company sold 78,740,157 shares of its common stock at a public offering price of $2.54 per share for net proceeds of $191.0 million after deducting the underwriting discount and related offering expenses.
The Company believes that its working capital and cash position, together with its right to direct B. Riley to purchase shares directly from the Company under the Amended ATM Agreement, will be sufficient to fund its on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying unaudited interim condensed consolidated financial statements.
The Company’s significant obligations consisted of the following as of September 30, 2024:
| (i) | Operating and finance leases totaling $316.2 million and $38.0 million, respectively, of which $67.0 million and $10.8 million, respectively, are due within the next 12 months. These leases are primarily related to sale/leaseback agreements entered into with various financial institutions to facilitate the Company’s commercial transactions with key customers. See Note 17, “Operating and Finance Lease Liabilities”, for more details. |
| (ii) | Finance obligations totaling $361.6 million, of which approximately $83.3 million is due within the next 12 months. Finance obligations consist primarily of debt associated with the sale of future revenues and failed sale/leaseback transactions. See Note 18, “Finance Obligations”, for more details. |
| (iii) | Convertible senior notes totaling $207.4 million, of which $58.2 million is due within the next twelve months. See Note 10, “Convertible Senior Notes”, for more details. |
| (iv) | Capital commitments totaling $38.9 million related to the Company’s equity method investments, of which all $38.9 million is due within the next 12 months. See Note 16, “Investments”, for more details. |
| (v) | Future payments under non-cancelable unconditional purchase obligations with a remaining term in excess of one year totaling $44.7 million, of which $32.0 million is due within the next 12 months. See Note 19, “Commitments and Contingencies”, for more details. |
| (vi) | Contingent consideration with an estimated fair value of approximately $92.0 million, of which $53.1 million is due within the next 12 months. See Note 15, “Fair Value Measurements”, for more details. |
Public and Private Offerings of Equity and Debt
At Market Issuance Sales Agreement
The Company entered into the Amended ATM Agreement with B. Riley, pursuant to which the Company may, from time to time, offer and sell through or to B. Riley, as sales agent or principal, shares of the Company’s common stock, having an aggregate offering price of up to $1.0 billion. During the three months ended September 30, 2024, the Company sold 13,045,572 shares of common stock at a weighted-average sales price of $2.35 per share for gross proceeds of $30.7 million with related issuance costs of $0.5 million. During the nine months ended September 30, 2024, the Company sold 189,411,442 shares of common stock at a weighted-average sales price of $3.23 per share for gross proceeds of $611.5 million with related issuance costs of $9.2 million.
Public Offering of Common Stock
On July 22, 2024, the Company sold 78,740,157 shares of its common stock at a public offering price of $2.54 per share for net proceeds of $191.0 million after deducting the underwriting discount and related offering expenses.
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Secured Debt
During the second quarter of 2024, the Company began repaying the principal and interest on a $2.0 million allowance for tenant work related to its manufacturing facility in Slingerlands, NY. In accordance with Accounting Standard Codification (“ASC”) 842, Leases (“ASC 842”), the allowance is treated as a freestanding financial instrument separate from the facility lease and is accounted for as long-term debt. The outstanding principal and carrying value of the debt was $1.7 million as of September 30, 2024.
In June 2020, the Company acquired debt as part of its acquisition of United Hydrogen Group Inc. During the three months ended September 30, 2024 and 2023, the Company repaid $0 and $0.3 million of principal related to this outstanding debt. During the nine months ended September 30, 2024 and 2023, the Company repaid $0.6 million and $5.7 million of principal related to this outstanding debt. The outstanding carrying value of the debt was $3.9 million as of September 30, 2024. The remaining outstanding principal on the debt was $4.9 million and the unamortized debt discount was $1.0 million, bearing varying interest rates ranging from 7.3% to 7.6%. The debt is scheduled to mature in 2026. As of September 30, 2024, the principal balance was due at each of the following dates as follows (in thousands):
December 31, 2024 | 2,757 | |
December 31, 2025 | 1,200 | |
December 31, 2026 | 900 | |
Total outstanding principal | $ | 4,857 |
7.00% Convertible Senior Notes
On March 20, 2024, the Company entered into separate, privately negotiated exchange agreements with certain holders of the Company’s outstanding 3.75% Convertible Senior Notes pursuant to which the Company exchanged $138.8 million in aggregate principal amount of the 3.75% Convertible Senior Notes, and accrued and unpaid interest of $1.6 million on such notes to, but excluding, March 20, 2024, for $140.4 million in aggregate principal amount of the Company’s new 7.00% Convertible Senior Notes due 2026, in each case, pursuant to the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”). Following the exchange, approximately $58.5 million in aggregate principal amount of the 3.75% Convertible Senior Notes remained outstanding with terms unchanged.
This transaction was accounted for as an extinguishment of debt. As a result, the Company recorded a loss on extinguishment of debt of $14.0 million in the unaudited interim condensed consolidated statement of operations during the first quarter of 2024. Loss on extinguishment of debt arises from the difference between the net carrying amount of the Company’s debt and the fair value of the assets transferred to extinguish the debt.
The 7.00% Convertible Senior Notes are the Company’s senior, unsecured obligations and are governed by the terms of an Indenture (the “Indenture”), dated as of March 20, 2024, entered into between the Company and Wilmington Trust, National Association, as trustee. The 7.00% Convertible Senior Notes bear cash interest at the rate of 7.00% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2024, to holders of record at the close of business on the preceding May 15 and November 15, respectively. The 7.00% Convertible Senior Notes mature on June 1, 2026, unless earlier converted or redeemed or repurchased by the Company.
The conversion rate for the 7.00% Convertible Senior Notes is initially 235.4049 shares of the Company’s common stock per $1,000 principal amount of 7.00% Convertible Senior Notes, which is equivalent to an initial conversion price of approximately $4.25 per share of common stock, which represents a premium of approximately 20% over the last reported sale price of Plug’s common stock on the Nasdaq Capital Market on March 12, 2024. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. Prior to the close of business on the business day immediately preceding December 1, 2025, the 7.00% Convertible Senior Notes will be convertible at the option of the holders of the 7.00% Convertible Senior Notes only upon the satisfaction of specified conditions and during certain periods. On or after December 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, the 7.00% Convertible Senior Notes will be convertible at the option of the
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holders of the 7.00% Convertible Senior Notes at any time regardless of these conditions. Conversions of the 7.00% Convertible Senior Notes will be settled in cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election.
Subject to certain exceptions and subject to certain conditions, holders of the 7.00% Convertible Senior Notes may require the Company to repurchase their 7.00% Convertible Senior Notes upon the occurrence of a “Fundamental Change” (as defined in the Indenture) prior to maturity for cash at a repurchase price equal to 100% of the principal amount of the 7.00% Convertible Senior Notes to be repurchased plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
The 7.00% Convertible Senior Notes will be redeemable, in whole or in part, at the Company’s option at any time on or after June 5, 2025, at a cash redemption price equal to the principal amount of the 7.00% Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the then-applicable conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the three trading days immediately preceding the date the Company sends the related redemption notice, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company sends such redemption notice.
In certain circumstances, conversions of 7.00% Convertible Senior Notes in connection with “Make-Whole Fundamental Changes” (as defined in the Indenture) or conversions of 7.00% Convertible Senior Notes called for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 282.4859 shares of the Company’s common stock per $1,000 principal amount of 7.00% Convertible Senior Notes, subject to adjustment. In such circumstance, a maximum of 39,659,890 shares of common stock, subject to adjustment, may be issued upon conversion of the 7.00% Convertible Senior Notes. There were no conversions of the 7.00% Convertible Senior Notes during the three and nine months ended September 30, 2024.
The 7.00% Convertible Senior Notes consisted of the following (in thousands):
September 30, | ||
2024 | ||
Principal amounts: | ||
Principal | $ | 140,396 |
Unamortized debt premium, net of offering costs (1) | 8,818 | |
Net carrying amount | $ | 149,214 |
| (1) | Included in the unaudited interim condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the notes using the effective interest rate method. |
The following table summarizes the total interest expense and effective interest rate related to the 7.00% Convertible Senior Notes for the three and nine months ended September 30, 2024 (in thousands, except for the effective interest rate):
Three months ended | Nine months ended | |||||
| September 30, 2024 |
| September 30, 2024 | |||
Interest expense | $ | 2,478 | $ | 5,224 | ||
Amortization of premium | (1,308) | (2,781) | ||||
Total | $ | 1,170 | $ | 2,443 | ||
Effective interest rate | 3.0% | 3.0% | ||||
The estimated fair value of the 7.00% Convertible Senior Notes as of September 30, 2024 was approximately $120.0 million. The fair value estimation was primarily based on a quoted price in an active market.
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3.75% Convertible Senior Notes
On May 18, 2020, the Company issued $200.0 million in aggregate principal amount of 3.75% Convertible Senior Notes due June 1, 2025 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. On May 29, 2020, the Company issued an additional $12.5 million in aggregate principal amount of 3.75% Convertible Senior Notes. On March 12, 2024, the Company exchanged $138.8 million in aggregate principal amount of the 3.75% Convertible Senior Notes for $140.4 million in aggregate principal amount of the Company’s new 7.00% Convertible Senior Notes due 2026. Following the exchange, approximately $58.5 million in aggregate principal amount of the 3.75% Convertible Senior Notes remained outstanding with terms unchanged. There were no conversions of the 3.75% Convertible Senior Notes during the three and nine months ended September 30, 2024 and 2023.
The 3.75% Convertible Senior Notes consisted of the following (in thousands):
September 30, | December 31, | ||||
2024 | 2023 | ||||
Principal amounts: | |||||
Principal | $ | 58,462 | $ | 197,278 | |
Unamortized debt issuance costs (1) | (299) | (2,014) | |||
Net carrying amount | $ | 58,163 | $ | 195,264 | |
| (1) | Included in the unaudited interim condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the notes using the effective interest rate method. |
The following table summarizes the total interest expense and effective interest rate related to the 3.75% Convertible Senior Notes for the three and nine months ended September 30, 2024 and 2023 (in thousands, except for the effective interest rate):
Three months ended | Nine months ended | |||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 |
| September 30, 2023 | |||||||
Interest expense | $ | 549 | $ | 1,849 | $ | 2,787 | $ | 5,547 | ||||
Amortization of debt issuance costs | 108 | 338 | 532 | 1,003 | ||||||||
Total | $ | 657 | $ | 2,187 | $ | 3,319 | $ | 6,550 | ||||
Effective interest rate | 4.5% | 4.5% | 4.5% | 4.5% | ||||||||
The estimated fair value of the 3.75% Convertible Senior Notes as of September 30, 2024 was approximately $54.1 million. The fair value estimation was primarily based on a quoted price in an active market.
Capped Call
In conjunction with the pricing of the 3.75% Convertible Senior Notes, the Company entered into privately negotiated capped call transactions (the “3.75% Notes Capped Call”) with certain counterparties at a price of $16.2 million. The 3.75% Notes Capped Call covers, subject to anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that underlie the initial 3.75% Convertible Senior Notes and is generally expected to reduce potential dilution to the Company’s common stock upon any conversion of the 3.75% Convertible Senior Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the 3.75% Notes Capped Call is initially $6.7560 per share, which represents a premium of approximately 60% over the last then-reported sale price of the Company’s common stock of $4.11 per share on the date of the transaction and is subject to certain adjustments under the terms of the 3.75% Notes Capped Call. The 3.75% Notes Capped Call becomes exercisable if the conversion option is exercised.
The net cost incurred in connection with the 3.75% Notes Capped Call was recorded as a reduction to additional paid-in capital in the unaudited interim condensed consolidated balance sheets at the time the transactions were entered into. The book value of the 3.75% Notes Capped Call is not remeasured.
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5.5% Convertible Senior Notes and Common Stock Forward
In March 2018, the Company issued $100.0 million in aggregate principal amount of the 5.5% Convertible Senior Notes due on March 15, 2023, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act, which have been fully repaid. In connection with the issuance of the 5.5% Convertible Senior Notes, the Company entered into a forward stock purchase transaction (the “Common Stock Forward”), pursuant to which the Company agreed to purchase 14,397,906 shares of its common stock for settlement on or about March 15, 2023. On May 18, 2020, the Company amended and extended the maturity of the Common Stock Forward to June 1, 2025. The number of shares of common stock that the Company will ultimately repurchase under the Common Stock Forward is subject to customary anti-dilution adjustments. The Common Stock Forward is subject to early settlement or settlement with alternative consideration in the event of certain corporate transactions.
The net cost incurred in connection with the Common Stock Forward of $27.5 million was recorded as an increase in treasury stock in the unaudited interim condensed consolidated balance sheets at the time the transactions were entered into. The related shares were accounted for as a repurchase of common stock. The book value of the Common Stock Forward is not remeasured.
There were no shares of common stock that settled in connection with the Common Stock Forward during the three and nine months ended September 30, 2024 and 2023.
Amazon Transaction Agreement in 2022
On August 24, 2022, the Company and Amazon entered into a Transaction Agreement (the “2022 Amazon Transaction Agreement”), under which the Company concurrently issued to Amazon.com NV Investment Holdings LLC, a wholly owned subsidiary of Amazon, a warrant (the “2022 Amazon Warrant”) to acquire up to 16,000,000 shares (the “2022 Amazon Warrant Shares”) of the Company’s common stock, subject to certain vesting events described below. The Company and Amazon entered into the 2022 Amazon Transaction Agreement in connection with a concurrent commercial arrangement under which Amazon agreed to purchase hydrogen fuel from the Company through August 24, 2029.
1,000,000 of the 2022 Amazon Warrant Shares vested immediately upon issuance of the 2022 Amazon Warrant. 15,000,000 of the 2022 Amazon Warrant Shares will vest in multiple tranches over the 7-year term of the 2022 Amazon Warrant based on payments made to the Company directly by Amazon or its affiliates, or indirectly through third parties, with 15,000,000 of the 2022 Amazon Warrant Shares fully vesting if Amazon-related payments of $2.1 billion are made in the aggregate. The exercise price for the first 9,000,000 2022 Amazon Warrant Shares is $22.9841 per share and the fair value on the grant date was $20.36. The exercise price for the remaining 7,000,000 2022 Amazon Warrant Shares will be an amount per share equal to 90% of the 30-day volume weighted average share price of the Company’s common stock as of the final vesting event that results in full vesting of the first 9,000,000 2022 Amazon Warrant Shares. The 2022 Amazon Warrant is exercisable through August 24, 2029.
Upon the consummation of certain change of control transactions (as defined in the 2022 Amazon Warrant) prior to the vesting of at least 60% of the aggregate 2022 Amazon Warrant Shares, the 2022 Amazon Warrant will automatically vest and become exercisable with respect to an additional number of 2022 Amazon Warrant Shares such that 60% of the aggregate 2022 Amazon Warrant Shares shall have vested. If a change of control transaction is consummated after the vesting of at least 60% of the aggregate 2022 Amazon Warrant Shares, then no acceleration of vesting will occur with respect to any of the unvested 2022 Amazon Warrant Shares as a result of the transaction. The exercise price and the 2022 Amazon Warrant Shares issuable upon exercise of the 2022 Amazon Warrant are subject to customary antidilution adjustments.
On August 24, 2022, 1,000,000 of the 2022 Amazon Warrant Shares associated with tranche 1 vested. The warrant fair value associated with the vested shares of tranche 1 of $20.4 million was capitalized to contract assets based on the grant date fair value and is subsequently amortized ratably as a reduction to revenue based on the Company’s estimate of revenue over the term of the agreement. As of September 30, 2024, the balance of the contract asset related to tranche 1
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was $18.8 million which is recorded in contract assets in the Company’s unaudited interim condensed consolidated balance sheet. During the second quarter of 2023, all 1,000,000 of the 2022 Amazon Warrant Shares associated with tranche 2 vested. The warrant fair value associated with the vested shares of tranche 2 was $20.4 million and was determined on the grant date of August 24, 2022. As of September 30, 2024, the balance of the contract asset related to tranche 2 was $18.8 million. Tranche 3 will vest over the next $1.0 billion of collections from Amazon and its affiliates. The grant date fair value of tranche 3 will also be amortized ratably as a reduction to revenue based on the Company’s estimate of revenue over the term of the agreement. As of September 30, 2024, the balance of the contract asset related to tranche 3 was $3.6 million. Because the exercise price has yet to be determined, the fair value of tranche 4 will be remeasured at each reporting period end and amortized ratably as a reduction to revenue based on the Company’s estimate of revenue over the term of the agreement.
As of September 30, 2024 and December 31, 2023, 2,500,000 and 2,000,000 of the 2022 Amazon Warrant Shares had vested, respectively, and none of the 2022 Amazon Warrant Shares had been exercised. The total amount of provision for common stock warrants recorded as a reduction of revenue for the 2022 Amazon Warrant during the three months ended September 30, 2024 and 2023 was $2.0 million and $1.6 million, respectively. The total amount of provision for common stock warrants recorded as a reduction of revenue for the 2022 Amazon Warrant during the nine months ended September 30, 2024 and 2023 was $4.4 million and $4.3 million, respectively.
The assumptions used to calculate the valuations of the 2022 Amazon Warrant as of August 24, 2022 and September 30, 2024 are as follows:
Tranches 1-3 |
| Tranche 4 | ||
August 24, 2022 | September 30, 2024 | |||
Risk-free interest rate | 3.15% | 3.51% | ||
Volatility | 75.00% | 95.00% | ||
Expected average term (years) | 7.00 | 1.15 | ||
Exercise price | $22.98 | $2.03 | ||
Stock price | $20.36 | $2.26 |
Walmart Transaction Agreement
On July 20, 2017, the Company and Walmart entered into a Transaction Agreement (the “Walmart Transaction Agreement”), pursuant to which the Company agreed to issue to Walmart a warrant (the “Walmart Warrant”) to acquire up to 55,286,696 shares of the Company’s common stock, subject to certain vesting events (the “Walmart Warrant Shares”). The Company and Walmart entered into the Walmart Transaction Agreement in connection with existing commercial agreements between the Company and Walmart with respect to the deployment of the Company’s GenKey fuel cell technology across various Walmart distribution centers. The existing commercial agreements contemplate, but do not guarantee, future purchase orders for the Company’s fuel cell technology. The vesting of the warrant shares was conditioned upon payments made by Walmart or its affiliates (directly or indirectly through third parties) pursuant to transactions entered into after January 1, 2017 under existing commercial agreements.
The exercise price for the first and second tranches of Walmart Warrant Shares was $2.1231 per share. After Walmart has made payments to the Company totaling $200.0 million, the third tranche of 20,368,784 Walmart Warrant Shares will vest in eight installments of 2,546,098 Walmart Warrant Shares each time Walmart or its affiliates, directly or indirectly through third parties, make an aggregate of $50.0 million in payments for goods and services to the Company, up to payments totaling $400.0 million in the aggregate. The exercise price of the third tranche of the Walmart Warrant Shares is $6.28 per share, which was determined pursuant to the terms of the Walmart Warrant as an amount equal to 90% of the 30-day volume weighted average share price of the Company’s common stock as of October 30, 2023, the final vesting date of the second tranche of the Walmart Warrant Shares. The Walmart Warrant is exercisable through July 20, 2027. The Walmart Warrant provides for net share settlement that, if elected by the holder, will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price. The Walmart Warrant provides for certain adjustments that may be made to the exercise price and the number of shares of common stock issuable upon exercise due
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to customary anti-dilution provisions based on future events. The Walmart Warrant is classified as an equity instrument. As of September 30, 2024, the balance of the contract asset related to the Walmart Warrant was $5.4 million.
As of September 30, 2024 and December 31, 2023, 40,010,108 and 34,917,912 of the Walmart Warrant Shares had vested, respectively, and the Walmart Warrant was exercised with respect to 13,094,217 shares of the Company’s common stock. During the three and nine months ended September 30, 2024 and 2023, there were no exercises with respect to the Walmart Warrant. The total amount of provision for common stock warrants recorded as a reduction of revenue for the Walmart Warrant during the three months ended September 30, 2024 was $3.9 million compared to a negative provision for common stock warrants recorded as an addition to revenue of $3.1 million for the three months ended September 30, 2023. The total amount of provision for common stock warrants recorded as a reduction of revenue for the Walmart Warrant during the nine months ended September 30, 2024 and 2023 was $11.6 million and $8.4 million, respectively.
Operating and Finance Lease Liabilities
As of September 30, 2024, the Company had operating leases, as lessee, primarily associated with sale/leaseback transactions that are partially secured by restricted cash and security deposits (see also Note 19, “Commitments and Contingencies”) as summarized below. These leases expire over the next one to seven years. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease.
Leases contain termination clauses with associated penalties, the amount of which cause the likelihood of cancellation to be remote. At the end of the lease term, the leased assets may be returned to the lessor by the Company, the Company may negotiate with the lessor to purchase the assets at fair market value, or the Company may negotiate with the lessor to renew the lease at market rental rates. No residual value guarantees are contained in the leases. No financial covenants are contained within the lease; however, the lease contains customary operational covenants such as the requirement that the Company properly maintain the leased assets and carry appropriate insurance. The leases include credit support in the form of either cash, collateral or letters of credit. See Note 19, “Commitments and Contingencies”, for a description of cash held as security associated with the leases.
The Company has finance leases associated with its property and equipment in Slingerlands, New York and at customer fueling locations.
Finance Obligation
The Company has sold future services to be performed associated with certain sale/leaseback transactions and recorded the balance as a finance obligation. The outstanding balance of this obligation as of September 30, 2024 was $296.0 million, $77.3 million and $218.7 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet. The outstanding balance of this obligation at December 31, 2023 was $350.8 million, $74.0 million and $276.8 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet. The amount is amortized using the effective interest method. Interest expense recorded related to finance obligations for the three months ended September 30, 2024 and 2023 was $9.0 million and $10.4 million, respectively. Interest expense recorded related to finance obligations for the nine months ended September 30, 2024 and 2023 was $28.4 million and $29.4 million, respectively.
During the third quarter of 2024, the Company entered into additional failed sale/leaseback transactions that were accounted for as financing obligations resulting in $56.9 million of additional finance obligations. No gain or loss was recorded as a result of these transactions. The outstanding balance of finance obligations related to sale/leaseback transactions as of September 30, 2024 was $65.6 million, $6.0 million and $59.6 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet with a residual value of $33.6 million. The outstanding balance of this obligation at December 31, 2023 was $17.6 million, $10.0 million and $7.6 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet.
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The fair value of the Company’s total finance obligations approximated their carrying value as of September 30, 2024 and December 31, 2023.
Restricted Cash
In connection with certain of the above noted sale/leaseback agreements, cash of $507.8 million and $573.5 million was required to be restricted as security as of September 30, 2024 and December 31, 2023, respectively, which restricted cash will be released over the lease term. As of September 30, 2024 and December 31, 2023, the Company also had certain letters of credit backed by security deposits totaling $307.9 million and $370.7 million, respectively, of which $276.5 million and $340.0 million are security for the above noted sale/leaseback agreements, respectively, and $31.4 million and $30.7 million are customs related letters of credit, respectively.
As of September 30, 2024 and December 31, 2023, the Company had $80.0 million and $76.8 million held in escrow related to the construction of certain hydrogen production plants, respectively.
The Company also had $0.1 million and $1.2 million of consideration held by our paying agent in connection with each of the Joule and CIS acquisitions, respectively, reported as restricted cash as of September 30, 2024, with a corresponding accrued liability on the Company’s unaudited interim condensed consolidated balance sheet. Additionally, the Company had $9.3 million and $11.7 million in restricted cash as collateral resulting from the Frames acquisition as of September 30, 2024 and December 31, 2023, respectively.
Guarantee
On May 30, 2023, our joint venture, HyVia, entered into a government grant agreement with Bpifrance. As part of the agreement, our wholly-owned subsidiary, Plug Power France, was required to issue a guarantee to Bpifrance in the amount of €20 million through the end of January 2027. Plug Power France is liable to the extent of the guarantee for sums due to Bpifrance from HyVia under the agreement based on the difference between the total amount paid by Bpifrance and the final amount certified by HyVia and Bpifrance. As part of the agreement, there are certain milestones that HyVia is required to meet, and the nonperformance of these milestones or termination of this agreement could result in this guarantee being called upon. As of September 30, 2024, no payments related to this guarantee have been made by the Company and Plug Power France did not record a liability for this guarantee as the likelihood of the guarantee being called upon is remote.
Unconditional Purchase Obligations
The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, take or pay contracts and service agreements. For certain vendors, the Company’s unconditional obligation to purchase a minimum quantity of raw materials at an agreed upon price is fixed and determinable; while certain other raw material costs will vary due to product forecasting and future economic conditions.
Future payments under non-cancelable unconditional purchase obligations with a remaining term in excess of one year as of September 30, 2024, were as follows (in thousands):
Remainder of 2024 | $ | 25,989 | |
2025 | 8,023 | ||
2026 | 8,023 | ||
2027 | 2,638 | ||
2028 | — | ||
2029 and thereafter | — | ||
Total | 44,673 |
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Restructuring
In February 2024, in a strategic move to enhance our financial performance and ensure long-term value creation in a competitive market, we approved a comprehensive initiative that encompasses a broad range of measures, including operational consolidation, strategic workforce adjustments, and various other cost-saving actions (the “Restructuring Plan”). These measures are aimed at increasing efficiency, improving scalability, and maintaining our leadership position in the renewable energy industry. We began executing the Restructuring Plan in February 2024 and expect the Restructuring Plan to be completed in the fourth quarter of 2024, subject to local law and consultation requirements.
The determination of when we accrue for involuntary termination benefits under restructuring plans depends on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. We account for involuntary termination benefits that are provided pursuant to one-time benefit arrangements in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”) whereas involuntary termination benefits that are part of an ongoing written or substantive plan are accounted for in accordance with ASC 712, Nonretirement Postemployment Benefits (“ASC 712”). We accrue a liability for termination benefits under ASC 420 in the period in which the plan is communicated to the employees and the plan is not expected to change significantly. For ongoing benefit arrangements, inclusive of statutory requirements, we accrue a liability for termination benefits under ASC 712 when the existing situation or set of circumstances indicates that an obligation has been incurred, it is probable the benefits will be paid, and the amount can be reasonably estimated. The restructuring charges that have been incurred but not yet paid are recorded in accrued expenses and other current liabilities in our unaudited interim condensed consolidated balance sheets, as they are expected to be paid within the next twelve months.
During the three months ended September 30, 2024, we incurred $0.6 million in restructuring costs recorded as severance expenses of $0.1 million and other restructuring costs of $0.5 million in the restructuring financial statement line item in the unaudited interim condensed consolidated statement of operations. During the nine months ended September 30, 2024, we incurred $8.2 million in restructuring costs recorded as severance expenses of $6.9 million and other restructuring costs of $1.3 million in the restructuring financial statement line item in the unaudited interim condensed consolidated statement of operations. Future restructuring costs are not expected to be material in subsequent quarters. The actual timing and amount of costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material.
Severance expense recorded during the three and nine months ended September 30, 2024 in accordance with ASC 420 was a result of the separation of full-time employees associated with the Restructuring Plan. As of September 30, 2024, $0.1 million of accrued severance-related costs were included in accrued expenses in our unaudited interim condensed consolidated balance sheets and are expected to be paid during the fourth quarter of 2024. For the three months ended September 30, 2024, other costs were represented by $0.5 million of other one-time employee termination benefits. For the nine months ended September 30, 2024, other costs were represented by (1) $0.2 million of legal and professional services costs, and (2) $1.1 million of other one-time employee termination benefits. As of September 30, 2024, $29 thousand of accrued other costs were included in accrued expenses in our unaudited interim condensed consolidated balance sheets and are expected to be paid during the fourth quarter of 2024.
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Extended Maintenance Contracts
On a quarterly basis, we evaluate any potential losses related to our extended maintenance contracts for sales of equipment, related infrastructure and other that have been sold. The following table shows the roll forward of balances in the accrual for loss contracts, including changes due to the provision for loss accrual, releases to service cost of sales, increase to loss accrual related to customer warrants, and foreign currency translation adjustment (in thousands):
Nine months ended | Year ended | ||||
September 30, 2024 |
| December 31, 2023 | |||
Beginning balance | $ | 137,853 | $ | 81,066 | |
Provision for loss accrual | 37,997 | 85,375 | |||
Releases to service cost of sales | (38,823) | (29,713) | |||
Increase to loss accrual related to customer warrants | 268 | 971 | |||
Foreign currency translation adjustment | 214 | 154 | |||
Ending balance | $ | 137,509 | $ | 137,853 | |
Critical Accounting Estimates
The consolidated financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including but not limited to those related to revenue recognition, valuation of inventories, intangible assets, valuation of long-lived assets, accrual for service loss contracts, operating and finance leases, allowance for doubtful accounts receivable, unbilled revenue, common stock warrants, stock-based compensation, income taxes, and contingencies. We base our estimates and judgments on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about (1) the carrying values of assets and liabilities and (2) the amount of revenue and expenses realized that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no changes in our critical accounting estimates from those reported in our 2023 Form 10-K.
Recent Accounting Pronouncements
Recently Adopted Accounting Guidance
There have been no significant changes in our reported financial position or results of operations and cash flows resulting from the adoption of new accounting pronouncements.
Recently Issued and Not Yet Adopted Accounting Pronouncements
Other than the standards mentioned in our 2023 Form 10-K, all issued but not yet effective accounting and reporting standards as of September 30, 2024 are either not applicable to the Company or are not expected to have a material impact on the Company.
Item 3 — Quantitative and Qualitative Disclosures about Market Risk
There has been no material change from the information provided in the Company’s 2023 Form 10-K under the section titled Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”.
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Item 4 — Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer) as appropriate, to allow for timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that such disclosure controls and procedures were effective as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There were no changes during the quarter ended September 30, 2024 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II. OTHER INFORMATION
Item 1 – Legal Proceedings
See Note 19, “Commitments and Contingencies”, within Item 1 of this Quarterly Report on Form 10-Q for a discussion regarding material legal proceedings.
Except as otherwise noted, there have been no material developments in legal proceedings. For previously reported information about legal proceedings, refer to Part I, Item 3, “Legal Proceedings”, of the Company’s 2023 Form 10-K.
Item 1A – Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that could materially affect the Company’s business, financial condition or future results discussed in the Company’s 2023 Form 10-K in Part I, Item 1A “Risk Factors” and the Company’s Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 in Part II, Item 1A “Risk Factors”. The risks described in the 2023 Form 10-K and the Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 are not the only risks that could affect the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and/or operating results in the future. As a supplement to the risk factors identified in the 2023 Form 10-K and the Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, below we have set forth updated risk factors. Other than as provided below, there have been no material changes to the risk factors identified in the 2023 Form 10-K and the Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024.
The funding of the loan guarantee from the Department of Energy may be delayed, and we may not be able to satisfy all of the technical, legal, environmental or financial conditions acceptable to the Department of Energy to receive the loan guarantee.
As previously announced, the Company received a conditional commitment for an up to $1.66 billion loan guarantee from the Department of Energy’s (“DOE”) Loan Programs Office to finance the development, construction, and ownership of up to six green hydrogen production facilities. Our ability to benefit from this loan guarantee is subject to
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certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents, to be satisfied before funding of the loan guarantee. Whether and when our DOE loan guarantee will be funded is subject to a number of factors outside of our control, including political administration changes, legislative enactments, administrative actions. The funding of such loan guarantee may take longer than we expect, and if we are not able to satisfy all of the technical, legal, environmental or financial conditions acceptable to the DOE to receive the loan guarantee, our business may be adversely affected.
We are subject to legal proceedings and legal compliance risks that could harm our business.
We are currently, and in the future may continue to be, subject to legal proceedings and similar disputes. In connection with any disputes or litigation in which we are involved, we may incur costs and expenses in connection with defending ourselves or in connection with the payment of any settlement or judgment or compliance with any ruling in connection therewith. It is often challenging to predict the outcome of legal proceedings and similar disputes with certainty. Determining reserves for any litigation is a complex and fact-intensive process that requires significant judgment calls. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, including diversion of management resources, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
(a) Not applicable.
(b) Not applicable.
(c) None.
Item 3 — Defaults Upon Senior Securities
None.
Item 4 — Mine Safety Disclosures
None.
Item 5 — Other Information
(c) Director and Officer Trading Arrangements
During the three months ended September 30, 2024,
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Item 6 — Exhibits
3.1 | |
3.2 | |
3.3 | |
3.4 | |
3.5 | |
3.6 | |
3.7 | |
3.8 | |
3.9 | |
10.1 | |
10.2* | |
31.1* | |
31.2* | |
32.1** | |
32.2** | |
101.INS* | Inline XBRL Instance Document |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Submitted electronically herewith. |
** | Pursuant to Item 601(b)(32)(ii) of Regulation S-K, this certification is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
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Signatures
Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PLUG POWER INC. | ||
Date: November 12, 2024 | By: | /s/ Andrew Marsh |
Andrew Marsh | ||
President, Chief Executive | ||
Date: November 12, 2024 | By: | /s/ Paul B. Middleton |
Paul B. Middleton | ||
Chief Financial Officer (Principal | ||
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