United States securities and exchange commission logo
July 16, 2021
Paul Middleton
Chief Financial Officer
Plug Power, Inc.
968 Albany Shaker Road
Latham, NY 12110
Re: Plug Power, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2020
Filed May 14, 2021
Form 8-K filed
November 9, 2020
File No. 001-34392
Dear Mr. Middleton:
We have reviewed your June 1, 2021 response to our comment letter
and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
February 10, 2021 letter.
Form 10-K for the Fiscal Year Ended December 31, 2020
Explanatory Note
Restatement Background, page 3
1. We note that you
restated your unaudited consolidated financial statements as of and for
the first three
quarterly periods in each of 2020 and 2019 as a result of misstatements and
that the financial
statements included in your prior quarterly reports on Form 10-Q for the
respective periods
should no longer be relied upon due to such misstatements. Your prior
quarterly reports on
Form 10-Q included additional information about the quarterly
periods, such as
management s discussion and analysis. Please tell us whether any of the
misstated additional
information included in prior quarterly reports that is not addressed in
this Form 10-K is
material and how you considered that in the disclosure provided in this
Paul Middleton
FirstName
Plug Power,LastNamePaul Middleton
Inc.
Comapany
July NamePlug Power, Inc.
16, 2021
July 16,
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FirstName LastName
filing. For example, explain if the misstatements result in different
trends from what was
included within your previous results of operations discussions and
whether that
represents material information that should be disclosed.
2. We note your response to comment 2. Please provide us with additional
information
regarding the nature and key terms of your sale/leaseback and sale of
future service
revenue contracts with third-party financial institutions. For
example, tell us if these items
are negotiated together, how repayment allocations are specified in
the contract, and the
specific business purpose for the sale of revenue component.
Internal Control Considerations, page 4
3. You disclose that your management identified a material weakness in
your internal control
over financial reporting ( ICFR ), resulting in the conclusion
that your ICFR and
disclosure controls and procedures ( DCP ) were not effective as
of December 31, 2020.
You also disclose on page 66 that certain of the identified
deficiencies resulted in material
misstatements that were identified and corrected in the consolidated
financial statements
as of and for each of the three years in the period ended December 31,
2020 and other
historical periods. Please tell us whether the identified material
weakness existed for
reporting periods prior to fiscal year 2020, and if so, how far back
it existed.
Critical Accounting Estimates
Impairment of Long-Lived Assets and PPA Executory Contract Considerations, page
61
4. Please address the following comments related to your power purchase
agreements
("PPA's"):
You disclose that you expect to recognize losses on your PPA
arrangements and that
you have not recognized a provision for the expected future
losses under these
revenue arrangements since they are considered "executory
contracts." Since you
identify one of the "primary" sources of the losses as the
maintenance component of
the PPA agreements, clarify how you determined loss provisions
should not be
recognized pursuant to ASC 605-20-25-6. In helping us understand
your accounting,
tell us the specific products and/or services you offer to end
users in PPA
arrangements. Also tell us if you account for your PPA
arrangements with end users
under ASC 842 or ASC 606 and explain in detail how you arrived at
your
determination. If the contracts are recognized under ASC 842, as
indicated in your
response to comment 4 in a previous letter dated May 8, 2019,
clarify why your
disclosures suggest the PPA's are revenue arrangements under ASC
606. If the
contracts are recognized under ASC 606, advise us why this
appears to contradict
your earlier response letter.
We note your disclosure on page 60 that "the assets deployed
for certain PPA
arrangements are not recoverable based on the undiscounted
estimated future cash
flows of the asset group" and that "the estimated fair value of
the assets in the asset
Paul Middleton
FirstName
Plug Power,LastNamePaul Middleton
Inc.
Comapany
July NamePlug Power, Inc.
16, 2021
July 16,
Page 3 2021 Page 3
FirstName LastName
group equal or exceed the carrying amount of the assets or
otherwise limit the amount
of impairment that would have been recognized." Explain to us in
sufficient detail
why you do not appear to have recognized any impairment losses
related to assets
with carrying values exceeding undiscounted estimated future cash
flows. In doing
so, clarify how you determine the PPA "asset group," as defined
in ASC 360-10-
20, when performing your impairment assessments under ASC
360-10-35-17. If
assets are not tested at the individual PPA level, please explain
how your determined
asset group represents the lowest level for which identifiable
cash flows are largely
independent of the cash flows of other groups of assets.
Notes to Consolidated Financial Statements
18. Warrant Transaction Agreements, page F-76
5. We note that on December 31, 2020 you waived the remaining vesting
conditions of the
Amazon warrants, resulting in an additional $399.7 million reduction
to revenue during
fiscal 2020. Please address the following comments related to the
immediate vesting of
these warrants:
You disclose on page F-77 that you recognized the revenue
reduction during fiscal
year 2020 because you "concluded such amount was not recoverable
from the
margins expected from future purchases by Amazon under the Amazon
Warrant, and
no exclusivity or other rights were conferred to the Company in
connection with the
December 31, 2020 waiver." Clarify for us what you mean by this
statement and cite
the specific authoritative accounting guidance you relied upon in
determining the
timing of the vesting charge.
Explain how you considered the guidance in ASC 606-10-32-27 in
determining the
timing of the vesting charge. In particular, clarify why the
warrant charges should
not be recognized as you recognize revenues for the transfer of
the related goods and
services to Amazon.
Form 8-K filed November 9, 2020
Exhibit 99.1, page 1
6. We note your response to comment 3. Based on your description of
"gross billings," it is
not clear to us how you determined this amount. Please provide us with
an example that
clearly illustrates the difference between the amounts: i) invoiced to
customers, ii)
recognized as revenue, and iii) presented as gross billings. In
addition, explain to us how
you concluded that gross billings is a metric rather than a non-GAAP
measure.
Paul Middleton
Plug Power, Inc.
July 16, 2021
Page 4
You may contact Andrew Blume, Staff Accountant, at (202) 551-3254 or Mark
Rakip,
Accounting Branch Chief, at (202) 551-3573 with any questions.
FirstName LastNamePaul Middleton Sincerely,
Comapany NamePlug Power, Inc.
Division of Corporation
Finance
July 16, 2021 Page 4 Office of Manufacturing
FirstName LastName