Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 10, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | PLUG POWER INC | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 1,093,691 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 180,265,759 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents, see notes 1 and 7 | $ 66,882 | $ 63,961 |
Restricted cash | 4,012 | 4,012 |
Accounts receivable | 10,684 | 22,650 |
Inventory | 39,150 | 32,752 |
Prepaid expenses and other current assets | 9,738 | 7,855 |
Total current assets | 130,466 | 131,230 |
Restricted cash | 43,854 | 43,823 |
Property, plant, and equipment, net of accumulated depreciation of $28,351 and $27,970, respectively | 8,750 | 7,255 |
Leased property, net of accumulated depreciation of $1,877 and $1,700, respectively | 13,237 | 1,667 |
Note receivable | 367 | 383 |
Goodwill | 8,827 | 8,478 |
Intangible assets, net | 4,656 | 4,644 |
Other assets | 12,012 | 11,976 |
Total assets | 222,169 | 209,456 |
Current liabilities: | ||
Accounts payable | 23,045 | 20,455 |
Accrued expenses | 9,968 | 9,852 |
Short-term borrowing | 23,961 | |
Product warranty reserve | 486 | 406 |
Accrual for loss contracts related to service | 3,400 | 4,100 |
Deferred revenue | 3,947 | 4,468 |
Finance obligations | 2,528 | 2,671 |
Other current liabilities | 376 | 754 |
Total current liabilities | 67,711 | 42,706 |
Accrual for loss contracts related to service | 4,902 | 5,950 |
Deferred revenue | 13,274 | 13,997 |
Common stock warrant liability | 4,317 | 5,735 |
Finance obligations | 14,396 | 14,809 |
Other liabilities | 385 | 370 |
Total liabilities | 104,985 | 83,567 |
Redeemable preferred stock | ||
Series C redeemable convertible preferred stock, $0.01 par value per share (aggregate involuntary liquidation preference $16,664) 10,431 shares authorized; Issued and outstanding: 5,231 at March 31, 2016 and December 31, 2015 | 1,153 | 1,153 |
Stockholders' equity: | ||
Common stock, $0.01 par value per share; 450,000,000 shares authorized; Issued (including shares in treasury): 180,720,285 at March 31, 2016 and 180,567,444 at December 31, 2015 | 1,807 | 1,806 |
Additional paid-in capital | 1,121,408 | 1,118,917 |
Accumulated other comprehensive income | 1,381 | 798 |
Accumulated deficit | (1,005,656) | (993,876) |
Less common stock in treasury: 479,953 at March 31, 2016 and December 31, 2015 | (2,909) | (2,909) |
Total stockholders' equity | 116,031 | 124,736 |
Total liabilities, redeemable preferred stock, and stockholders' equity | $ 222,169 | $ 209,456 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Property, plant, and equipment, accumulated depreciation | $ 28,351 | $ 27,970 |
Leased property under capital lease, accumulated depreciation | 1,877 | 1,700 |
Accumulated amortization | $ 626 | $ 469 |
Series C redeemable convertible Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series C redeemable convertible Preferred Stock, shares authorized | 10,431 | 10,431 |
Series C redeemable convertible Preferred Stock, shares issued | 5,231 | 5,231 |
Series C redeemable convertible Preferred Stock, shares outstanding | 5,231 | 5,231 |
Series C redeemable convertible Preferred Stock, aggregate involuntary liquidation preference (in dollars) | $ 16,664 | $ 16,664 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 450,000,000 | 450,000,000 |
Common Stock, shares issued | 180,720,285 | 180,567,444 |
Common stock in treasury, shares | 479,953 | 479,953 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Sales of fuel cell systems and related infrastructure | $ 5,218 | $ 5,090 |
Services performed on fuel cell systems and related infrastructure | 5,273 | 2,645 |
Power Purchase Agreements | 2,706 | 977 |
Fuel delivered to customers | 2,010 | 659 |
Other | 125 | 45 |
Total revenue | 15,332 | 9,416 |
Cost of revenue: | ||
Sales of fuel cell systems and related infrastructure | 3,898 | 5,079 |
Services performed on fuel cell systems and related infrastructure | 5,783 | 4,770 |
Power Purchase Agreements | 2,881 | 751 |
Fuel delivered to customers | 2,411 | 876 |
Other | 189 | 51 |
Total cost of revenue | 15,162 | 11,527 |
Gross profit (loss) | 170 | (2,111) |
Operating expenses: | ||
Research and development | 4,830 | 2,901 |
Selling, general and administrative | 8,290 | 7,749 |
Total operating expenses | 13,120 | 10,650 |
Operating loss | (12,950) | (12,761) |
Interest and other income | 87 | 31 |
Change in fair value of common stock warrant liability | 1,278 | 1,769 |
Interest and other expense | (561) | (90) |
Loss before income taxes | (12,146) | (11,051) |
Income tax benefit | 392 | |
Net loss attributable to the Company | (11,754) | (11,051) |
Preferred stock dividends declared | (26) | (26) |
Net loss attributable to common shareholders | $ (11,780) | $ (11,077) |
Net loss per share: | ||
Basic and diluted (in dollars per share) | $ (0.07) | $ (0.06) |
Weighted average number of common shares outstanding | 180,125,763 | 173,365,830 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Consolidated Statements of Comprehensive Loss | ||
Net loss attributable to the Company | $ (11,754) | $ (11,051) |
Other comprehensive income - foreign currency translation adjustment | 583 | |
Comprehensive loss | $ (11,171) | $ (11,051) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Common Stock | Additional Paid-in-Capital | Accumulated Other Comprehensive Income | Treasury Stock | Accumulated Deficit | Total |
Balance at Dec. 31, 2015 | $ 1,806 | $ 1,118,917 | $ 798 | $ (2,909) | $ (993,876) | $ 124,736 |
Balance (in shares) at Dec. 31, 2015 | 180,567,444 | 479,953 | 180,567,444 | |||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss attributable to the Company | (11,754) | $ (11,754) | ||||
Other comprehensive income | 583 | 583 | ||||
Stock based compensation | 2,217 | 2,217 | ||||
Stock based compensation (in shares) | 21,547 | |||||
Stock dividend | 26 | (26) | ||||
Stock dividend (in shares) | 13,015 | |||||
Exercise of warrants | $ 1 | 248 | 249 | |||
Exercise of warrants (in shares) | 118,279 | |||||
Balance at Mar. 31, 2016 | $ 1,807 | $ 1,121,408 | $ 1,381 | $ (2,909) | $ (1,005,656) | $ 116,031 |
Balance (in shares) at Mar. 31, 2016 | 180,720,285 | 479,953 | 180,720,285 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows From Operating Activities: | ||
Net loss attributable to the Company | $ (11,754) | $ (11,051) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property, plant and equipment, and leased property | 571 | 475 |
Amortization of intangible assets | 145 | 608 |
Stock-based compensation | 2,217 | 1,697 |
Change in fair value of common stock warrant liability | (1,278) | (1,769) |
Changes in operating assets and liabilities that provide (use) cash, net of effects of acquisitions: | ||
Accounts receivable | 11,966 | 8,324 |
Inventory | (6,398) | (7,357) |
Prepaid expenses and other assets | (1,832) | (902) |
Note receivable | 16 | 16 |
Accounts payable, accrued expenses, product warranty reserve and other liabilities | 2,423 | (3,160) |
Accrual for loss contracts related to service | (1,748) | |
Deferred revenue | (1,244) | (526) |
Net cash used in operating activities | (6,916) | (13,645) |
Cash Flows From Investing Activities: | ||
Purchase of property, plant and equipment | (1,889) | (229) |
Purchase for construction of leased assets | (11,747) | |
Net cash used in investing activities | (13,636) | (229) |
Cash Flows From Financing Activities: | ||
Change in restricted cash | (31) | (718) |
Proceeds from exercise of warrants | 109 | |
Proceeds from exercise of stock options | 133 | |
Proceeds from short-term borrowing, net of transaction costs | 23,874 | |
Principal payments on finance obligations | (556) | |
Principal payments on obligations under capital lease | (209) | |
Net cash provided by (used in) financing activities | 23,396 | (794) |
Effect of exchange rate changes on cash | 77 | |
Increase (decrease) in cash and cash equivalents | 2,921 | (14,668) |
Cash and cash equivalents, beginning of period | 63,961 | 146,205 |
Cash and cash equivalents, end of period | 66,882 | 131,537 |
Other Supplemental Cash Flow Information: | ||
Cash paid for interest | $ 232 | $ 91 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2016 | |
Nature of Operations. | |
Nature of Operations | 1. Nature of Operations Description of Business Plug Power Inc., or the Company, is a leading provider of alternative energy technology focused on the design, development, commercialization and manufacture of hydrogen fuel cell systems used primarily for the material handling and stationary power market. We are focused on proton exchange membrane, or PEM, fuel cell and fuel processing technologies, fuel cell/battery hybrid technologies, and associated hydrogen storage and dispensing infrastructure from which multiple products are available. A fuel cell is an electrochemical device that combines hydrogen and oxygen to produce electricity and heat without combustion. Hydrogen is derived from hydrocarbon fuels such as liquid petroleum gas, or LPG, natural gas, propane, methanol, ethanol, gasoline or biofuels. Plug Power develops complete hydrogen delivery, storage and refueling solutions for customer locations. Hydrogen can also be obtained from the electrolysis of water, or produced on-site at consumer locations through a process known as reformation. Currently the Company obtains hydrogen by purchasing it from fuel suppliers. We provide and continue to develop fuel cell product solutions to replace lead-acid batteries in material handling vehicles and industrial trucks for some of the world’s largest distribution and manufacturing businesses. We are focusing our efforts on material handling applications (forklifts) at multi-shift high volume manufacturing and high throughput distribution sites where our products and services provide a unique combination of productivity, flexibility and environmental benefits. Our current product line includes: GenDrive, our hydrogen fueled PEM fuel cell system providing power to material handling vehicles; GenFuel, our hydrogen fueling delivery system; GenCare, our ongoing maintenance program for both the GenDrive fuel cells and GenFuel products; GenSure (formerly ReliOn), 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; and GenKey, our turn-key solution combining either GenDrive or GenSure with GenFuel and GenCare, offering complete simplicity to customers transitioning to fuel cell power; and GenFund, a collaboration with leasing organizations to provide cost efficient and seamless financing solutions to customers. We provide our products worldwide, with a primary focus on North America, through our direct product sales force, and by leveraging relationships with original equipment manufacturers, or OEMs, and their dealer networks. We were organized as a corporation in the State of Delaware on June 27, 1997. Unless the context indicates otherwise, the terms “Company,” “Plug Power,” “we,” “our” or “us” as used herein refers to Plug Power Inc. and its subsidiaries. Liquidity Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses, growth in inventory to support both shipments of new units and servicing the installed base, growth in equipment leased to customers under long-term arrangements, funding the growth in our GenKey “turn-key” solution , which includes the installation of our customer’s hydrogen infrastructure as well as de livery of the hydrogen fuel, continued developmen t and expansion of our products, and the repayment or refinancing of our short-term borrowing. Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and quantity of product orders and shipments; attaining positive gross margins; the timing and amount of our operating expenses; the timing and costs of working capital needs; the timing and costs of building a sales base; the ability of our customers to obtain financing to support commercial transactions; our ability to obtain financing arrangements to support the sale or leasing of our products and services to customers , including financing arrangements to repay or refinance our short-term borrowing, and the terms of such agreements that may require us to pledge or restrict substantial amounts of our cash to support these financing arrangements; the timing and costs of developing marketing and distribution channels; the timing and costs of product service requirements; the timing and costs of hiring and training product staff; the extent to which our products gain market acceptance; the timing and costs of product development and introductions; the extent of our ongoing and new research and development programs; and changes in our strategy or our planned activities. If we are unable to fund our operations with positive cash flows and cannot obtain external financing, we may not be able to sustain future operations. As a result, we may be required to delay, reduce and/or cease our operations and/or seek bankruptcy protection. We have experienced and continue to experience negative cash flows from operations and net losses. The Company incurred net losses attributable to common shareholders of $11.8 million for the three months ended March 31, 2016 and $55.8 million, $88.6 million and $62.8 million for the years ended December 31, 2015, 2014, and 2013, respectively, and has an accumulated deficit of $1.0 billion at March 31, 2016. During the three months ended March 31, 2016, cash used in operating activities was $6.9 million, consisting primarily of a net loss attributable to the Company of $11.8 million, offset by the impact of noncash charges/gains and net inflows from fluctuations in working capital and other assets and liabilities of $3.2 million. The changes in working capital primarily were related to collections of accounts receivable offset by an investment in inventory procured to meet our backlog requirements. As of March 31, 2016, we had cash and cash equivalents of $66.9 million and net working capital of $62.8 million. By comparison, at December 31, 2015, we had cash and cash equivalents of $64.0 million and net working capital of $88.5 million. Additionally, a portion of the cash and cash equivalents on hand at March 31, 2016, is required to be maintained at all times under a covenant requirement associated with the Company’s secured term loan facility that requires a minimum unencumbered cash and cash equivalents balance equal to or greater than the outstanding principal balance ( $25.0 million at March 31, 2016). Net cash used in investing activities for the three months ended March 31, 2016 included purchases of property, plant and equipment and outflows associated with materials, labor, and overhead necessary to construct new leased assets of $11.7 million. Cash outflows related to equipment that we sell and equipment we lease directly to customers are included in net cash used in operating activities and net cash used in investing activities, respectively . Net cash provided by financing activities for the three months ended March 31, 2016 primarily resulted from borrowings against a short-term secured term loan facility , as described in note 7 . The secured term loan facility has events of default, including a material adverse change clause that is at the sole discretion of the lender. During 2014 and 2015, the Company signed sale/leaseback agreements with the Company’s primary financial institution (M&T Bank or the Bank) to facilitate the Company’s commercial transactions with key customers. These agreements represent the sale of the Company’s fuel cell systems, hydrogen infrastructure and agreements to provide related extended maintenance to the Bank. The Company then leased the fuel cell systems and hydrogen infrastructure back from the Bank and operates them at customer locations to fulfill Power Purchase Agreements (PPAs). In connection with these operating leases, the Bank requires the Company to maintain cash balances in restricted accounts securing its lease obligations to the Bank. Cash added to these restricted accounts was $14.2 million during 2015. No additional cash was added during the three months ended March 31, 2016, other than interest earned on restricted cash balances. Cash received from customers under the PPAs is used to make lease payments to the Bank. As the Company performs under these agreements, the required restricted cash balances are released, according to a set schedule. At March 31, 2016, the Company had seven PPA deployments related to these sale/leaseback agreements. At March 31, 2016, the total remaining lease payments to the Bank under these agreements were $24.9 million and have been secured with restricted cash and pledged service escrows. Cash associated with sales of future revenues is required to be recorded as financing obligations on the consolidated balance sheets and accordingly represents a financing cash inflow. The master lease agreement with the Bank requires the Company to maintain a minimum of $50 million of unrestricted cash. As mentioned above, the Company’s remaining contractual lease payments to the Bank are fully secured through a combination of restricted cash and pledges on funds escrowed for future service by the Company. The covenant is maintained in association with the residual exposure of the Bank, which stems from tax benefits taken by the Bank that could be recaptured should the underlying assets not be deployed for five years. This residual exposure at March 31, 2016 amounted to approximately $12.1 million, and the exposure decreases with the passage of time. In the event that the Company’s unrestricted cash balance falls below $50 million, the Company is entitled to cure the failure by providing additional restricted cash to secure the outstanding residual tax exposure of the Bank at that time. In ad dition to the financing activities described above, we have historically funded our operations primarily through public and private offerings of common and preferred stock. The Company believes that it s current working capital and cash anticipated to be generated from future operations , as well as various sources of capital from project financing platforms with various third parties that are currently being evaluated, will provide sufficient liquidity to fund operations for at least the next twelve months. This projection is based on our current expectations regarding new project financing and product sales and service, cost structure, cash burn rate and other operating assumptions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited interim consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly, in accordance with U.S. generally accepted accounting principles (GAAP), the financial position, results of operations and cash flows for all periods presented, have been made. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, filed for the fiscal year ended December 31, 2015. The information presented in the accompanying consolidated balance sheet as of December 31, 2015 has been derived from the Company’s December 31, 2015 audited consolidated financial statements. All other information has been derived from the unaudited interim consolidated financial statements of the Company. Revenue Recognition The Company recognizes revenue under arrangements for products and services, which may include the sale of products and related services, including revenue from installation, service and maintenance, spare parts, hydrogen fueling services (which may include hydrogen supply as well as hydrogen fueling infrastructure) and leased units. The Company also recognizes revenue under research and development contracts, which are primarily cost reimbursement contracts associated with the development of PEM fuel cell technology. Products and Services The Company enters into revenue arrangements that may contain a combination of fuel cell systems and equipment, installation, service, maintenance, spare parts, and other support services. Revenue arrangements containing fuel cell systems and equipment may be sold, or leased to customers. For these multiple deliverable arrangements, the Company accounts for each separate deliverable as a separate unit of accounting if the delivered item or items have value to the customer on a standalone basis. The Company considers a deliverable to have standalone value if the item is sold separately by us or another entity or if the item could be resold by the customer. The Company allocates revenue to each separate deliverable based on its relative selling price. For a majority of our deliverables, the Company determines relative selling prices using its best estimate of the selling price since vendor-specific objective evidence and third-party evidence is generally not available for the deliverables involved in its revenue arrangements due to a lack of a competitive environment in selling fuel cell technology. When determining estimated selling prices, the Company considers the cost to produce the deliverable, a reasonable gross margin on that deliverable, the selling price and profit margin for similar products and services, the Company’s ongoing pricing strategy and policies, the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold, as applicable. The Company determines estimated selling prices for deliverables in its arrangements based on the specific facts and circumstances of each arrangement and analyzes the estimated selling prices used for its allocation of consideration of each arrangement. Once relative selling prices are determined, the Company proportionately allocates the sale consideration to each element of the arrangement. The allocated sales consideration related to fuel cell systems and equipment, spare parts, and hydrogen infrastructure is recognized as revenue at shipment if title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. The allocated sales consideration related to service and maintenance is generally recognized as revenue on a straight-line basis over the term of the contract, as appropriate. With respect to sales of consigned spare parts, the Company does not recognize revenue until the risks and rewards of ownership have transferred, the price is fixed, and the Company has a reasonable expectation of collection upon billing. For those customers who do not purchase an extended maintenance contract, the Company does not include a right of return on its products other than rights related to standard warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated standard warranty costs at the same time that revenue is recognized for the related product. Only a limited number of fuel cell units are under standard warranty. In a vast majority of its commercial transactions, the Company sells extended maintenance contracts that generally provide for a five to ten year warranty from the date of product installation. These types of contracts are accounted for as a separate deliverable, and accordingly, revenue generated from these transactions is deferred and recognized in income over the warranty period, generally on a straight-line basis. Additionally, the Company may enter into annual service and extended maintenance contracts that are billed monthly. Revenue generated from these transactions is recognized in income on a straight-line basis over the term of the contract. Costs are recognized as incurred over the term of the contract. When costs are projected to exceed revenues on the life of the contract, an accrual for loss contracts is recorded. Costs are estimated based upon historical experience, contractual agreements and the estimated impact of the Company’s cost reduction initiatives. The actual results may differ from these estimates. The Company is a party to PPAs with certain key customers, such as Walmart. Revenue associated with these agreements are treated as rental income and recognized on a straight-line basis over the life of the agreements. The Company also has rental expense associated with sale/leaseback agreements with financial institutions that were entered into commensurate with the PPAs. Rental expense is also recognized on a straight-line basis over the life of the agreements and is characterized as cost of PPA revenue on the accompanying unaudited interim consolidated statement of operations. The Company purchases hydrogen fuel from suppliers and sells to its customers upon delivery. Revenue and cost of revenue related to this fuel is recorded as dispensed and delivered, respectively, and are included in the respective “Fuel delivered to customers” lines on the unaudited interim consolidated statements of operations. Research and Development Contracts Contract accounting is used for research and development contract revenue. The Company generally shares in the cost of these programs with cost sharing percentages ranging from 30% to 50% of total project costs. Revenue from time and material contracts is recognized on the basis of hours expended plus other reimbursable contract costs incurred during the period and is included within the “other” revenue line on the unaudited interim consolidated statement of operations. All allowable work performed through the end of each calendar quarter is billed, subject to limitations in the respective contracts. We expect to continue research and development contract work that is directly related to our current product development efforts. Sale/leaseback transactions The Company provides its products and services to certain customers in the form of a PPA that generally expire in six years. For these specific transactions, the Company will complete a sale/leaseback for the related assets to a financial institution for similar terms. The Company accounts for sale/leaseback transactions as operating leases in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 840-40, Leases – Sale/Leaseback Transactions . Cash Equivalents For purposes of the unaudited interim consolidated statements of cash flows, the Company considers all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents. At March 31, 2016 and December 31, 2015, cash equivalents consist of money market accounts. The Company’s cash and cash equivalents are deposited with financial institutions primarily located in the U.S. and may at times exceed insured limits. Common Stock Warrant Accounting The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Subtopic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity , as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. In compliance with applicable securities law, registered common stock warrants that require the issuance of registered shares upon exercise and do not sufficiently preclude an implied right to cash settlement are accounted for as derivative liabilities. We currently classify these derivative warrant liabilities on the accompanying unaudited interim consolidated balance sheets as a long-term liability, which is revalued at each balance sheet date subsequent to the initial issuance using the Black-Scholes pricing model. The Black-Scholes pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, requires the Company to develop its own assumptions. Changes in the fair value of the warrants are reflected in the accompanying unaudited interim consolidated statements of operations as change in fair value of common stock warrant liability. Use of Estimates The unaudited interim 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 unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Reclassifications are made, whenever necessary, to prior period financial statements to conform to the current period presentation. These reclassifications did not have a net impact the results of operations or net cash flows in the periods presented. Recent Accounting Pronouncements In March 2016, an accounting update was issued to simplify various aspects related to how share-based payments are accounted for and presented. This accounting update is effective for annual periods beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on the consolidated financial statements. In February 2016, an accounting update was issued which requires balance sheet recognition for operating leases, among other changes to previous lease guidance. This accounting update is effective for fiscal years beginning after December 15, 2018. The Company is evaluating the impact this update will have on the consolidated financial statements. In July 2015, an accounting update was issued that changes inventory measurement from lower of cost or market to lower of cost and net realizable value. The new standard applies to inventory measured at first-in, first-out (FIFO). This accounting update is effective for the annual reporting periods beginning after December 15, 2016, and interim periods within those years. The Company does not expect the adoption of this update to have a significant effect on the consolidated financial statements. In August 2014, an accounting update was issued relating to how management assesses conditions and events that could raise substantial doubt about an entity’s ability to continue as a going concern. This accounting update is effective for reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. The Company does not expect the adoption of this update to have a significant effect on the consolidated financial statements. In June 2014, an accounting update was issued that replaces the existing revenue recognition framework regarding contracts with customers. In July 2015, the Financial Accounting Standards Board (FASB) announced a one year delay in the required adoption date from January 1, 2017 to January 1, 2018. The Company is evaluating the effect this update will have on the consolidated financial statements and has not yet selected a transition method. |
Acquisition of HyPulsion
Acquisition of HyPulsion | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Acquisition of HyPulsion | 3. Acquisition of HyPulsion On July 24, 2015, the Company entered into a Share Purchase Agreement with Axane, pursuant to which on July 31, 2015, the Company (through a wholly-owned subsidiary) acquired Axane’s 80% equity interest in HyPulsion for $11.5 million, payable in shares of its common stock. In connection with the aforementioned agreement, the Company initially issued 4,781,250 shares of its common stock at closing. On August 26, 2015, the Company subsequently issued an additional 1,613,289 shares of common stock pursuant to a post-closing true-up provision, which was liability classified contingent consideration. The Company acquired all of the net assets of HyPulsion, with the excess of the purchase price over net assets attributed to goodwill. Goodwill associated with the acquisition represents expanded access to the European markets related to the sale of fuel cell technology for material handling equipment. Changes in goodwill between the acquisition date and March 31, 2016 are attributed to foreign currency translation. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share. | |
Earnings Per Share | 4. Earnings Per Share The following table provides the components of the calculations of basic and diluted earnings per share (in thousands, except share amounts): Three months ended March 31, 2016 March 31, 2015 Numerator: Net loss attributable to common shareholders $ $ Denominator: Weighted average number of common shares outstanding When the Company is in a net loss position, all common stock equivalents would be considered to be anti-dilutive and are, therefore, not included in the determination of diluted earnings per share. The potential dilutive common shares are summarized as follows: At March 31, 2016 2015 Stock options outstanding (1) Restricted stock outstanding Common stock warrants (2) Preferred stock (3) Number of dilutive potential common shares (1) During the three months ended March 31, 2016 and 2015, the Company granted 15,000 and 210,000 stock options, respectively. (2) In May 2011, the Company issued 7,128,563 warrants as part of an underwritten public offering. As a result of additional public offerings, and pursuant to the effect of the anti-dilution provisions of these warrants, the number of warrants increased to 22,995,365 . Of these warrants issued in May 2011, 74,188 and 219,342 were unexercised as of March 31, 2016 and 2015, respectively. In February 2013, the Company issued 23,637,500 warrants as part of an underwritten public offering. Of these warrants issued in February 2013, 100 were unexercised as of March 31, 2016 and 2015. In January 2014, the Company issued 4,000,000 warrants as part of an underwritten public offering. Of these warrants issued in January 2014, none have been exercised as of March 31, 2016 and 2015 . All warrants have anti-dilution provisions. (3) The preferred stock amount represents the dilutive potential common shares of the Series C redeemable convertible preferred stock issued on May 16, 2013, based on the conversion price of the preferred stock as of March 31, 2016. Of the 10,431 preferred shares issued in May 2013, 5,200 had been converted to common stock as of March 31, 2016. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2016 | |
Inventory. | |
Inventory | 5. Inventory Inventory as of March 31, 2016 and December 31, 2015 consists of the following (in thousands): March 31, 2016 December 31, 2015 Raw materials and supplies $ $ Work-in-process Finished goods $ $ |
Leased Property
Leased Property | 3 Months Ended |
Mar. 31, 2016 | |
Capital Lease | |
Leased Property | 6. Leased Property Leased property at March 31, 2016 and December 31, 2015 consists of the following (in thousands): March 31, 2016 December 31, 2015 Leased property under capital lease $ $ Less: accumulated depreciation Leased property under capital lease, net $ $ |
Short-Term Borrowing
Short-Term Borrowing | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Short-Term Borrowing | 7. Short-Term Borrowing On March 2, 2016, the Company, together with its subsidiaries Emerging Power Inc. and Emergent Power Inc. (Loan Parties), entered into a Loan Agreement with Generate Lending, LLC (Lender). The Loan Agreement, among other things, provides for a $30 million secured term loan facility (the Term Loan Facility). Advances under the Term Loan Facility bear interest at the rate of 12.0% per annum, subject to compliance with financial covenants and other conditions. The term of the Loan Agreement is one year, ending March 2, 2017 (Maturity Date). Pursuant to the Loan Agreement, $25.0 million of the Term Loan Facility was drawn upon during the three months ended March 31, 2016. Availability of the remaining $5 million of the Term Loan Facility is subject to the Lender’s discretion. Interest is payable on a monthly basis and the entire then outstanding principal balance of the Term Loan Facility, together will all accrued and unpaid interest, is due and payable on the Maturity Date. The Term Loan Facility is effectively an advance on project financing the Lender intends to provide. Accordingly, as per the Loan Agreement, as projects are financed, the proceeds will be used to repay the Term Loan Facility. On and after October 1, 2016, as and when the Company receives net proceeds from certain restricted cash accounts securing the financing of customer PPAs, the Company is required to prepay the outstanding principal balance of the Term Loan Facility with such net proceeds. All obligations under the Loan Agreement are unconditionally guaranteed by the Company’s subsidiaries, Emerging Power Inc. and Emergent Power Inc. The Term Loan Facility is secur ed by substantially all of the Loan Parties’ assets, including all intellectual property, all securities in domestic subsidiaries and 65% of the securities in foreign subsidiaries, subject to certain exceptions and exclusions. The Loan Agreement has financial covenants that require the Company to maintain at all times minimum unencumbered cash and cash equivalents equal or greater than the then outstanding principal balance of the Term Loan Facility. The financial covenants also require the Company to maintain at all times, on a consolidated basis for the Loan Parties and their subsidiaries, an amount of current assets minus current liabilities (excluding amounts owing under the Term Loan Facility) equal to or greater than 200% of the then outstanding principal balance under the Term Loan Facility. The Loan Agreement contains customary affirmative covenants for transactions of this type and other affirmative covenants agreed to by the parties, including, among others, the provision of annual and quarterly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters. The Loan Agreement also provides that each of the Loan Parties will direct proceeds from certain project finance arrangements to a controlled account subject to a first lien security interest by the Lender. The Loan Agreement contains customary negative covenants, including, among others, restrictions on the incurrence of indebtedness, granting of liens, making acquisitions, making loans, dissolving, entering into leases (other than sale/leaseback transactions) and asset sales. The Loan Agreement also provides for a number of customary events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control, judgment and material adverse effect defaults. |
Accrual for Loss Contracts Rela
Accrual for Loss Contracts Related to Service | 3 Months Ended |
Mar. 31, 2016 | |
Contractors [Abstract] | |
Accruals for Loss Contracts Related to Service | 8. Accrual for Loss Contracts Related to Service In the fourth quarter of 2015, the Company projected estimated service costs related to extended maintenance contracts and determined that certain loss contracts existed and recorded a provision for loss contracts related to service. No additional provision was recorded during the three months ended March 31, 2016. The following table summarizes activity related to the accrual for loss contracts related to service during the three months ended March 31, 2016 (in thousands): Beginning balance - January 1, 2016 $ Reductions for losses realized Ending balance - March 31, 2016 $ |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes. | |
Income Taxes | 9. Income Taxes The deferred tax asset generated from our 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 carry forward will not be realized. The Company also recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. During the three months ended March 31, 2016, the Company released its liability for unrecognized tax benefits of $392 thousand, as the related statute of limitations has expired. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements. | |
Fair Value Measurements | 10. Fair Value Measurements The Company’s common stock warrant liability represents the only financial instrument measured at fair value on a recurring basis in the consolidated balance sheets. The fair value measurement is determined by using Level 3 inputs due to the lack of active and observable markets that can be used to price identical assets. Level 3 inputs are unobservable inputs and should be used to determine fair value only when observable inputs are not available. Unobservable inputs should be developed based on the best information available in the circumstances, which might include internally generated data and assumptions being used to price the asset or liability. Fair value of the common stock warrant liability is based on the Black-Scholes pricing model which is based, in part, upon unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions. The Company used the following assumptions for its common stock warrants: March 31, 2016 March 31, 2015 Risk-free interest rate 0.30 % - 1.04 % 0.25 % - 1.27 % Volatility 56.47 % - 108.92 % 107.98 % - 129.6 % Expected average term 0.17 - 2.79 1.17 - 3.80 There was no expected dividend yield for the warrants granted. If factors change and different assumptions are used, the warrant liability and the change in estimated fair value could be materially different. Generally, as the market price of our common stock increases, the fair value of the warrant increases, and conversely, as the market price of our common stock decreases, the fair value of the warrant decreases. Also, a significant increase in the volatility of the market price of the Company’s common stock, in isolation, would result in a significantly higher fair value measurement; and a significant decrease in volatility would result in a significantly lower fair value measurement. The following table shows reconciliations of the beginning and ending balances for the common stock warrant liability (in thousands): Three months ended Common stock warrant liability March 31, 2016 March 31, 2015 Beginning of period $ $ Change in fair value of common stock warrants Exercise of common stock warrants — End of period $ $ |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 11. Commitments and Contingencies Operating Leases As of March 31, 2016 and December 31, 2015, the Company has several non-cancelable operating leases (as lessor and as lessee), primarily associated with sale/leaseback transactions that are partially secured by restricted cash (see also note 1) as summarized below. These leases expire over the next six years. Minimum rent payments under operating leases are recognized on a straight ‑line basis over the term of the lease. Leases where the Company is the lessor contain termination clauses with associated penalties, the amount of which cause the likelihood of cancelation to be remote. Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of March 31, 2016 are (in thousands): As Lessor As Lessee Remainder of 2016 $ 9,380 $ 9,029 2017 12,507 12,036 2018 12,507 11,811 2019 12,507 10,622 2020 11,351 9,488 Thereafter 7,441 5,876 Total future minimum lease payments $ 65,693 $ 58,862 Rental expense for all operating leases was $3.0 million and $0.9 million for three months ended March 31, 2016 and 2015, respectively. At March 31, 2016 and December 31, 2015, prepaid rent and security deposits associated with sale/leaseback transactions were $12.1 million, and are included in other assets on the consolidated balance sheets. Finance Obligations During the year ended December 31, 2015, the Company received cash for 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 at March 31, 2016 and December 31, 2015 is $14.5 million and $15.1 million, respectively. The amount is amortized using the effective interest method. In 2013, the Company completed a sale-leaseback transaction of its property in Latham, New York, for an aggregate sale price of $4.5 million. Although the property was sold and the Company has no legal ownership of the facility, the Company was prohibited from recording the transaction as a sale because of continuing involvement with the property. Accordingly, the sale has been accounted for as a financing transaction, which requires the Company to continue reporting the building as an asset and to record a financing obligation for the sale price. Liabilities relating to this agreement of $2.4 million and $2.5 million have been recorded as a finance obligation, in the accompanying unaudited interim consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. Restricted Cash The Company has entered into sale/leaseback agreements associated with its products and services. In connection with these agreements, cash of $46.8 million is required to be restricted as security and will be released over the lease term. Included in the $46.8 million are security deposits backing letters of credit, as disclosed in the Operating Leases section above. The Company also has letters of credit in the aggregate amount of $1.0 million associated with an agreement to provide hydrogen infrastructure and hydrogen to a customer at its distribution center and with a finance obligation from the sale/leaseback of its building. Cash collateralizing these letters of credit is also considered restricted cash. Litigation Legal matters are defended and handled in the ordinary course of business. The Company has established accruals for matters for which management considers a loss to be probable and reasonably estimable. It is the opinion of management that facts known at the present time do not indicate that such litigation, after taking into account insurance coverage and the aforementioned accruals, will have a material adverse impact on our results of operations, financial position, or cash flows. Concentrations of credit risk Concentrations of credit risk with respect to receivables exist due to the limited number of select customers with whom the Company has initial commercial sales arrangements. To mitigate credit risk, the Company performs appropriate evaluation of a prospective customer’s financial condition. At March 31, 2016, two customers comprise approximately 42.6% of the total accounts receivable balance, with each customer individually representing 22.0% and 20.6% of total accounts receivable, respectively. At December 31, 2015, two customers comprise approximately 50.9% of the total accounts receivable balance, with each customer individually representing 38.5% and 12.4% of total accounts receivable, respectively. For the three months ended March 31, 2016, 47.7% of total consolidated revenues were associated with Walmart. For the three months ended March 31, 2015, 63.5% of total consolidated revenues were associated with Walmart. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly, in accordance with U.S. generally accepted accounting principles (GAAP), the financial position, results of operations and cash flows for all periods presented, have been made. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, filed for the fiscal year ended December 31, 2015. The information presented in the accompanying consolidated balance sheet as of December 31, 2015 has been derived from the Company’s December 31, 2015 audited consolidated financial statements. All other information has been derived from the unaudited interim consolidated financial statements of the Company. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under arrangements for products and services, which may include the sale of products and related services, including revenue from installation, service and maintenance, spare parts, hydrogen fueling services (which may include hydrogen supply as well as hydrogen fueling infrastructure) and leased units. The Company also recognizes revenue under research and development contracts, which are primarily cost reimbursement contracts associated with the development of PEM fuel cell technology. Products and Services The Company enters into revenue arrangements that may contain a combination of fuel cell systems and equipment, installation, service, maintenance, spare parts, and other support services. Revenue arrangements containing fuel cell systems and equipment may be sold, or leased to customers. For these multiple deliverable arrangements, the Company accounts for each separate deliverable as a separate unit of accounting if the delivered item or items have value to the customer on a standalone basis. The Company considers a deliverable to have standalone value if the item is sold separately by us or another entity or if the item could be resold by the customer. The Company allocates revenue to each separate deliverable based on its relative selling price. For a majority of our deliverables, the Company determines relative selling prices using its best estimate of the selling price since vendor-specific objective evidence and third-party evidence is generally not available for the deliverables involved in its revenue arrangements due to a lack of a competitive environment in selling fuel cell technology. When determining estimated selling prices, the Company considers the cost to produce the deliverable, a reasonable gross margin on that deliverable, the selling price and profit margin for similar products and services, the Company’s ongoing pricing strategy and policies, the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold, as applicable. The Company determines estimated selling prices for deliverables in its arrangements based on the specific facts and circumstances of each arrangement and analyzes the estimated selling prices used for its allocation of consideration of each arrangement. Once relative selling prices are determined, the Company proportionately allocates the sale consideration to each element of the arrangement. The allocated sales consideration related to fuel cell systems and equipment, spare parts, and hydrogen infrastructure is recognized as revenue at shipment if title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. The allocated sales consideration related to service and maintenance is generally recognized as revenue on a straight-line basis over the term of the contract, as appropriate. With respect to sales of consigned spare parts, the Company does not recognize revenue until the risks and rewards of ownership have transferred, the price is fixed, and the Company has a reasonable expectation of collection upon billing. For those customers who do not purchase an extended maintenance contract, the Company does not include a right of return on its products other than rights related to standard warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated standard warranty costs at the same time that revenue is recognized for the related product. Only a limited number of fuel cell units are under standard warranty. In a vast majority of its commercial transactions, the Company sells extended maintenance contracts that generally provide for a five to ten year warranty from the date of product installation. These types of contracts are accounted for as a separate deliverable, and accordingly, revenue generated from these transactions is deferred and recognized in income over the warranty period, generally on a straight-line basis. Additionally, the Company may enter into annual service and extended maintenance contracts that are billed monthly. Revenue generated from these transactions is recognized in income on a straight-line basis over the term of the contract. Costs are recognized as incurred over the term of the contract. When costs are projected to exceed revenues on the life of the contract, an accrual for loss contracts is recorded. Costs are estimated based upon historical experience, contractual agreements and the estimated impact of the Company’s cost reduction initiatives. The actual results may differ from these estimates. The Company is a party to PPAs with certain key customers, such as Walmart. Revenue associated with these agreements are treated as rental income and recognized on a straight-line basis over the life of the agreements. The Company also has rental expense associated with sale/leaseback agreements with financial institutions that were entered into commensurate with the PPAs. Rental expense is also recognized on a straight-line basis over the life of the agreements and is characterized as cost of PPA revenue on the accompanying unaudited interim consolidated statement of operations. The Company purchases hydrogen fuel from suppliers and sells to its customers upon delivery. Revenue and cost of revenue related to this fuel is recorded as dispensed and delivered, respectively, and are included in the respective “Fuel delivered to customers” lines on the unaudited interim consolidated statements of operations. Research and Development Contracts Contract accounting is used for research and development contract revenue. The Company generally shares in the cost of these programs with cost sharing percentages ranging from 30% to 50% of total project costs. Revenue from time and material contracts is recognized on the basis of hours expended plus other reimbursable contract costs incurred during the period and is included within the “other” revenue line on the unaudited interim consolidated statement of operations. All allowable work performed through the end of each calendar quarter is billed, subject to limitations in the respective contracts. We expect to continue research and development contract work that is directly related to our current product development efforts. |
Sale-leaseback transactions | Sale/leaseback transactions The Company provides its products and services to certain customers in the form of a PPA that generally expire in six years. For these specific transactions, the Company will complete a sale/leaseback for the related assets to a financial institution for similar terms. The Company accounts for sale/leaseback transactions as operating leases in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 840-40, Leases – Sale/Leaseback Transactions . |
Cash Equivalents | Cash Equivalents For purposes of the unaudited interim consolidated statements of cash flows, the Company considers all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents. At March 31, 2016 and December 31, 2015, cash equivalents consist of money market accounts. The Company’s cash and cash equivalents are deposited with financial institutions primarily located in the U.S. and may at times exceed insured limits. |
Common Stock Warrant Accounting | Common Stock Warrant Accounting The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Subtopic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity , as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. In compliance with applicable securities law, registered common stock warrants that require the issuance of registered shares upon exercise and do not sufficiently preclude an implied right to cash settlement are accounted for as derivative liabilities. We currently classify these derivative warrant liabilities on the accompanying unaudited interim consolidated balance sheets as a long-term liability, which is revalued at each balance sheet date subsequent to the initial issuance using the Black-Scholes pricing model. The Black-Scholes pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, requires the Company to develop its own assumptions. Changes in the fair value of the warrants are reflected in the accompanying unaudited interim consolidated statements of operations as change in fair value of common stock warrant liability. |
Use of Estimates | Use of Estimates The unaudited interim 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 unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Reclassifications are made, whenever necessary, to prior period financial statements to conform to the current period presentation. These reclassifications did not have a net impact the results of operations or net cash flows in the periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, an accounting update was issued to simplify various aspects related to how share-based payments are accounted for and presented. This accounting update is effective for annual periods beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on the consolidated financial statements. In February 2016, an accounting update was issued which requires balance sheet recognition for operating leases, among other changes to previous lease guidance. This accounting update is effective for fiscal years beginning after December 15, 2018. The Company is evaluating the impact this update will have on the consolidated financial statements. In July 2015, an accounting update was issued that changes inventory measurement from lower of cost or market to lower of cost and net realizable value. The new standard applies to inventory measured at first-in, first-out (FIFO). This accounting update is effective for the annual reporting periods beginning after December 15, 2016, and interim periods within those years. The Company does not expect the adoption of this update to have a significant effect on the consolidated financial statements. In August 2014, an accounting update was issued relating to how management assesses conditions and events that could raise substantial doubt about an entity’s ability to continue as a going concern. This accounting update is effective for reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. The Company does not expect the adoption of this update to have a significant effect on the consolidated financial statements. In June 2014, an accounting update was issued that replaces the existing revenue recognition framework regarding contracts with customers. In July 2015, the Financial Accounting Standards Board (FASB) announced a one year delay in the required adoption date from January 1, 2017 to January 1, 2018. The Company is evaluating the effect this update will have on the consolidated financial statements and has not yet selected a transition method. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share. | |
Schedule of components of the calculations of basic and diluted earnings per share: | The following table provides the components of the calculations of basic and diluted earnings per share (in thousands, except share amounts): Three months ended March 31, 2016 March 31, 2015 Numerator: Net loss attributable to common shareholders $ $ Denominator: Weighted average number of common shares outstanding |
Schedule of potential dilutive common shares | At March 31, 2016 2015 Stock options outstanding (1) Restricted stock outstanding Common stock warrants (2) Preferred stock (3) Number of dilutive potential common shares (1) During the three months ended March 31, 2016 and 2015, the Company granted 15,000 and 210,000 stock options, respectively. (2) In May 2011, the Company issued 7,128,563 warrants as part of an underwritten public offering. As a result of additional public offerings, and pursuant to the effect of the anti-dilution provisions of these warrants, the number of warrants increased to 22,995,365 . Of these warrants issued in May 2011, 74,188 and 219,342 were unexercised as of March 31, 2016 and 2015, respectively. In February 2013, the Company issued 23,637,500 warrants as part of an underwritten public offering. Of these warrants issued in February 2013, 100 were unexercised as of March 31, 2016 and 2015. In January 2014, the Company issued 4,000,000 warrants as part of an underwritten public offering. Of these warrants issued in January 2014, none have been exercised as of March 31, 2016 and 2015 . All warrants have anti-dilution provisions. (3) The preferred stock amount represents the dilutive potential common shares of the Series C redeemable convertible preferred stock issued on May 16, 2013, based on the conversion price of the preferred stock as of March 31, 2016. Of the 10,431 preferred shares issued in May 2013, 5,200 had been converted to common stock as of March 31, 2016. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory. | |
Schedule of Inventory | Inventory as of March 31, 2016 and December 31, 2015 consists of the following (in thousands): March 31, 2016 December 31, 2015 Raw materials and supplies $ $ Work-in-process Finished goods $ $ |
Leased Property (Tables)
Leased Property (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Capital Lease | |
Schedule of Leased Property | Leased property at March 31, 2016 and December 31, 2015 consists of the following (in thousands): March 31, 2016 December 31, 2015 Leased property under capital lease $ $ Less: accumulated depreciation Leased property under capital lease, net $ $ |
Accrual for Loss Contracts Re23
Accrual for Loss Contracts Related to Service (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Contractors [Abstract] | |
Summary of accrual for loss contracts | The following table summarizes activity related to the accrual for loss contracts related to service during the three months ended March 31, 2016 (in thousands): Beginning balance - January 1, 2016 $ Reductions for losses realized Ending balance - March 31, 2016 $ |
Fair Value Measurments (Tables)
Fair Value Measurments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements. | |
Assumptions used to calculate common stock warrants | March 31, 2016 March 31, 2015 Risk-free interest rate 0.30 % - 1.04 % 0.25 % - 1.27 % Volatility 56.47 % - 108.92 % 107.98 % - 129.6 % Expected average term 0.17 - 2.79 1.17 - 3.80 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table shows reconciliations of the beginning and ending balances for the common stock warrant liability (in thousands): Three months ended Common stock warrant liability March 31, 2016 March 31, 2015 Beginning of period $ $ Change in fair value of common stock warrants Exercise of common stock warrants — End of period $ $ |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies. | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of March 31, 2016 are (in thousands): As Lessor As Lessee Remainder of 2016 $ 9,380 $ 9,029 2017 12,507 12,036 2018 12,507 11,811 2019 12,507 10,622 2020 11,351 9,488 Thereafter 7,441 5,876 Total future minimum lease payments $ 65,693 $ 58,862 |
Nature of Operations (Details)
Nature of Operations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016USD ($)agreement | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Liquidity | |||||
Net loss attributable to common shareholders | $ 11,780 | $ 11,077 | $ 55,800 | $ 88,600 | $ 62,800 |
Accumulated deficit | 1,005,656 | 993,876 | |||
Net cash used in operating activities | 6,916 | 13,645 | |||
Net loss attributable to the Company | (11,754) | (11,051) | |||
Net inflows of noncash operating assets and liabilities | 3,200 | ||||
Cash and cash equivalents | 66,882 | $ 131,537 | 63,961 | $ 146,205 | |
Net working capital | 62,800 | 88,500 | |||
Cash added to the restricted accounts | $ 0 | $ 14,200 | |||
Number of power purchase agreements | agreement | 7 | ||||
Remaining lease payment | $ 58,862 | ||||
Power purchase agreements | |||||
Liquidity | |||||
Remaining lease payment | 24,900 | ||||
Master Lease | |||||
Liquidity | |||||
Minimum level of unrestricted cash | $ 50,000 | ||||
Number of years that the underlying assets not be deployed | 5 years | ||||
Residual exposure | $ 12,100 | ||||
Secured term loan facility | Minimum | |||||
Liquidity | |||||
Cash and cash equivalents | $ 25,000 |
Summary of Siginificant Account
Summary of Siginificant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Revenue Recognition | |
Minimum term of extended warranty contracts sold | 5 years |
Maximum term of extended warranty contracts sold | 10 years |
Sale/leaseback transactions | |
Lease Term | 6 years |
Minimum | |
Research and Development. | |
Cost Sharing Percentages of research and development contracts | 30.00% |
Maximum | |
Research and Development. | |
Cost Sharing Percentages of research and development contracts | 50.00% |
Acquisition of HyPulsion (Detai
Acquisition of HyPulsion (Details) - USD ($) $ in Thousands | Aug. 26, 2015 | Jul. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2015 |
Business Combination, Goodwill [Abstract] | ||||
Total goodwill recognized | $ 8,827 | $ 8,478 | ||
Axane, S.A. | HyPulsion | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interest acquired | 80.00% | |||
Value of shares of common stock issued | $ 11,500 | |||
Number of shares of common stock issued | 1,613,289 | 4,781,250 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||||
Net (loss) income attributable to common shareholders | $ (11,780) | $ (11,077) | $ (55,800) | $ (88,600) | $ (62,800) |
Denominator: | |||||
Weighted average number of common shares outstanding | 180,125,763 | 173,365,830 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Shares (Details) - shares | 1 Months Ended | 3 Months Ended | ||||
May. 31, 2014 | Jan. 31, 2014 | Feb. 28, 2013 | May. 31, 2011 | Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share | ||||||
Number of dilutive potential common shares | 21,526,612 | 18,361,522 | ||||
Stock options | ||||||
Earnings Per Share | ||||||
Stock options granted | 15,000 | 210,000 | ||||
Warrants issued in May, 2011 | ||||||
Earnings Per Share | ||||||
Number of warrants issued (in shares) | 7,128,563 | |||||
Warrants outstanding (in shares) | 22,995,365 | |||||
Number of warrants unexercised (in shares) | 74,188 | 219,342 | ||||
Warrants issued in February, 2013 | ||||||
Earnings Per Share | ||||||
Number of warrants issued (in shares) | 23,637,500 | |||||
Number of warrants unexercised (in shares) | 100 | 100 | ||||
Warrants issued in January, 2014 | ||||||
Earnings Per Share | ||||||
Number of warrants issued (in shares) | 4,000,000 | |||||
Number of warrants unexercised (in shares) | 4,000,000 | 4,000,000 | ||||
Series C redeemable convertible preferred stock | ||||||
Earnings Per Share | ||||||
Stock options granted | 10,431 | |||||
Number of preferred shares that had been converted to common stock | 5,200 | |||||
Stock options | ||||||
Earnings Per Share | ||||||
Number of dilutive potential common shares | 11,693,286 | 8,191,928 | ||||
Restricted stock | ||||||
Earnings Per Share | ||||||
Number of dilutive potential common shares | 204,444 | 395,558 | ||||
Warrants | ||||||
Earnings Per Share | ||||||
Number of dilutive potential common shares | 4,074,288 | 4,219,442 | ||||
Preferred stock | ||||||
Earnings Per Share | ||||||
Number of dilutive potential common shares | 5,554,594 | 5,554,594 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory. | ||
Raw materials and supplies | $ 26,708 | $ 23,705 |
Work-in-process | 8,589 | 5,567 |
Finished goods | 3,853 | 3,480 |
Total inventory | $ 39,150 | $ 32,752 |
Leased Property (Details)
Leased Property (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Capital Lease | ||
Leased property under capital lease | $ 15,114 | $ 3,367 |
Less: accumulated depreciation | (1,877) | (1,700) |
Leased property under capital lease, net | $ 13,237 | $ 1,667 |
Short-Term Borrowing (Details)
Short-Term Borrowing (Details) - USD ($) $ in Thousands | Mar. 02, 2016 | Mar. 31, 2016 |
Short-term Debt [Line Items] | ||
Short-term borrowing | $ 23,961 | |
Secured term loan facility | ||
Short-term Debt [Line Items] | ||
Borrowing Amount | $ 30,000 | |
Interest rate (as a percent) | 12.00% | |
Term of loan agreement | 1 year | |
Short-term borrowing | 25,000 | |
Remaining available borrowing capacity | $ 5,000 | |
Percentage of securities offered in foreign subsidiaries | 65.00% | |
Minimum percentage of current assets less current liabilities to be maintained | 200.00% |
Accrual for Loss Contracts Re34
Accrual for Loss Contracts Related to Service (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Contractors [Abstract] | |
Beginning balance | $ 10,050 |
Reduction for losses realized | (1,748) |
Ending balance | $ 8,302 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Income Taxes. | |
Unrecognized tax benefits released due to expiration of stature of limitations | $ 392 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation Technique (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Minimum | ||
Valuation technique for assets measured and recorded at fair value | ||
Risk-free interest rate (as a percent) | 0.30% | 0.25% |
Volatility (as a percent) | 56.47% | 107.98% |
Expected average term | 2 months 1 day | 1 year 2 months 1 day |
Maximum | ||
Valuation technique for assets measured and recorded at fair value | ||
Risk-free interest rate (as a percent) | 1.04% | 1.27% |
Volatility (as a percent) | 108.92% | 129.60% |
Expected average term | 2 years 9 months 15 days | 3 years 9 months 18 days |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Instruments Reconciliation (Details) - Warrants - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Reconciliations of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (i.e. Level 3) | ||
Balance at the beginning of the period | $ 5,735 | $ 9,418 |
Change in fair value of common stock warrants | (1,278) | (1,768) |
Exercise of common stock warrants | (140) | |
Balance at the end of the period | $ 4,317 | $ 7,650 |
Commitment and Contingencies -
Commitment and Contingencies - Operating Leases (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016USD ($)item | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2013USD ($) | |
Operating Leases | ||||
Lease Term | 6 years | |||
As Lessor | ||||
Remainder of 2016 | $ 9,380 | |||
2,017 | 12,507 | |||
2,018 | 12,507 | |||
2,019 | 12,507 | |||
2,020 | 11,351 | |||
Thereafter | 7,441 | |||
Total future minimum lease payments | 65,693 | |||
As Lessee | ||||
Remainder of 2016 | 9,029 | |||
2,017 | 12,036 | |||
2,018 | 11,811 | |||
2,019 | 10,622 | |||
2,020 | 9,488 | |||
Thereafter | 5,876 | |||
Total future minimum lease payments | 58,862 | |||
Rental expense and rental income for all operating leases | ||||
Rental expense for all operating lease | 3,000 | $ 900 | ||
Cash received for future services | 14,500 | $ 15,100 | ||
Aggregate sale price in sale-leaseback transaction | $ 4,500 | |||
Cash received in sale-leaseback transaction | 2,400 | 2,500 | ||
Cash held in escrow deposit | 46,800 | |||
Letter of credit with Silicon Valley Bank | 1,000 | |||
Other assets. | ||||
Rental expense and rental income for all operating leases | ||||
Prepaid rent and security deposit | $ 12,100 | $ 12,100 | ||
Credit risk | Accounts receivable. | ||||
Rental expense and rental income for all operating leases | ||||
Number of customers | item | 2 | 2 | ||
Concentration risk (as a percent) | 42.60% | 50.90% | ||
Customer one | Credit risk | Accounts receivable. | ||||
Rental expense and rental income for all operating leases | ||||
Concentration risk (as a percent) | 22.00% | 38.50% | ||
Customer two | Credit risk | Accounts receivable. | ||||
Rental expense and rental income for all operating leases | ||||
Concentration risk (as a percent) | 20.60% | 12.40% | ||
Walmart | Customer concentration | Revenues. | ||||
Rental expense and rental income for all operating leases | ||||
Concentration risk (as a percent) | 47.70% | 63.50% |
Commitment and Contingencies 39
Commitment and Contingencies - Concentrations of Credit Risk (Details) - Accounts receivable. - Credit risk - item | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Customer Concentration | ||
Number of customers | 2 | 2 |
Concentration risk (as a percent) | 42.60% | 50.90% |
Customer one | ||
Customer Concentration | ||
Concentration risk (as a percent) | 22.00% | 38.50% |
Customer two | ||
Customer Concentration | ||
Concentration risk (as a percent) | 20.60% | 12.40% |