SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
X - QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
QUARTERLY PERIOD ENDED MARCH 31, 2002 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM ________ TO _________
Commission File Number: 00027527
PLUG POWER INC.
(Exact name of registrant as specified in its charter)
968 ALBANY-SHAKER ROAD, LATHAM, NEW YORK 12110
(Address of registrant's principal executive office)
(518) 782-7700
(Registrant's telephone number, including area code)
Delaware 22-3672377
(State or other jurisdiction (I.R.S. Employer
of Incorporation) Identification Number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
The number of shares of common stock outstanding as of April 30, 2002 was
50,457,121 with a par value of $.01 per share.
Plug Power Inc. and Subsidiary
INDEX to FORM 10-Q
PART I. FINANCIAL INFORMATION Page
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets - March 31, 2002
and December 31, 2001 3
Condensed Consolidated Statements of Operations - Three Month
Periods ended March 31, 2002 and March 31, 2001
and Cumulative Amounts from Inception 4
Condensed Consolidated Statements of Cash Flows - Three Month
Periods ended March 31, 2002 and March 31, 2001 and
and Cumulative Amounts from Inception 5
Notes to Condensed Consolidated Financial Statements 6 - 11
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 18
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 18
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings 19
Item 4 - Submission of Matters to a Vote of Security Holders 19
Item 6 - Exhibits and Reports on Form 8-K 19 - 22
Signatures 23
2
Plug Power Inc. and Subsidiary
(A Development Stage Enterprise)
Condensed Consolidated Balance Sheets
Assets December 31, 2001 March 31, 2002
------------------- -------------------
Current assets:
Cash and cash equivalents $ 53,648,145 $ 61,008,723
Restricted cash 310,000 310,000
Marketable securities 39,034,314 23,659,271
Accounts receivable 2,608,321 862,047
Inventory 2,271,278 2,228,900
Prepaid development costs 1,760,131 1,382,740
Prepaid expenses and other current assets 932,719 1,037,599
------------------- -------------------
Total current assets 100,564,908 90,489,280
Restricted cash 5,000,274 5,000,274
Property, plant and equipment, net 30,240,631 29,535,572
Intangible asset 3,470,139 2,831,725
Investment in affiliates 11,498,000 10,913,625
Other assets 600,055 558,271
------------------- -------------------
Total assets $ 151,374,007 $ 139,328,747
=================== ===================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 762,972 $ 828,669
Accrued expenses 3,421,106 3,435,782
Deferred revenue 5,684,793 4,413,026
Current portion of capital lease obligation
and long-term debt 330,072 321,808
------------------- -------------------
Total current liabilities 10,198,943 8,999,285
Long-term debt 5,000,274 5,000,274
Deferred revenue 400,000 350,000
Capital lease obligation 4,706 3,461
Other liabilities 767,193 767,193
------------------- -------------------
Total liabilities 16,371,116 15,120,213
------------------- -------------------
Stockholders' equity:
Preferred stock, $0.01 par value per share; 5,000,000
shares authorized; none issued and outstanding -- --
Common stock, $0.01 par value per share;
245,000,000 shares authorized at March 31, 2002 and
245,000,000 shares authorized at December 31, 2001;
50,399,650 shares issued and outstanding, March 31,
2002 and 50,322,928 shares issued and outstanding
December 31, 2001 503,229 503,997
Paid-in capital 342,842,203 343,642,960
Deficit accumulated during the development stage (208,342,541) (219,938,423)
------------------- -------------------
Total stockholders' equity 135,002,891 124,208,534
------------------- -------------------
Total liabilities and stockholders' equity $ 151,374,007 $ 139,328,747
=================== ===================
The accompanying notes are an integral part of the condensed consolidated financial statements.
3
Plug Power Inc. and Subsidiary
(A Development Stage Enterprise)
Condensed Consolidated Statements of Operations
Three months ended March 31, Cumulative
--------------------------------------------- Amounts from
2001 2002 Inception
------------------ ------------------- ---------------------
Revenue
Product and service revenue $ - $ 2,572,537 $ 5,145,971
Research and development contract revenue 1,027,249 331,729 30,612,934
------------------ ------------------- ---------------------
Total revenue 1,027,249 2,904,266 35,758,905
Cost of revenue and expenses
Cost of revenues 1,970,798 1,691,164 51,625,617
In-process research and development - - 9,026,640
Research and development expense:
Noncash stock-based compensation - 69,013 1,617,602
Other research and development 16,750,293 10,857,747 162,253,155
General and administrative expense:
Noncash stock-based compensation - 343,076 11,881,319
Other general and administrative 1,889,537 1,417,169 26,850,704
Interest expense 77,925 24,977 837,517
------------------ ------------------- ---------------------
Operating loss (19,661,304) (11,498,880) (228,333,649)
Interest income 1,292,794 487,373 16,059,351
------------------ ------------------- ---------------------
Loss before equity in losses of affiliates (18,368,510) (11,011,507) (212,274,298)
Equity in losses of affiliates (646,013) (584,375) (7,664,125)
------------------ ------------------- ---------------------
Net loss $ (19,014,523) $ (11,595,882) $ (219,938,423)
================== =================== =====================
Loss per share:
Basic and diluted $ (0.43) $ (0.23)
================== ===================
Weighted average number of common
shares outstanding 43,919,731 50,345,437
================== ===================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
Plug Power Inc. and Subsidiary
(A Development Stage Enterprise)
Condensed Consolidated Statements of Cash Flows
Three months ended March 31,
--------------------------------------- Cumulative
Amounts from
2001 2002 Inception
----------------- ------------------ -------------------
Cash Flows From Operating Activities:
Net loss $ (19,014,523) $ (11,595,882) $ (219,938,423)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,019,128 1,226,756 11,054,120
Equity in losses of affiliates 646,013 584,375 7,664,125
Amortization of intangible asset 839,232 638,414 6,792,775
Noncash prepaid development costs 2,062,333 377,391 6,617,260
Amortization of deferred grant revenue (50,000) (50,000) (450,000)
Stock based compensation - 569,139 14,119,895
Loss on disposal of property, plant and equipment - - 108,625
In-kind services - - 1,340,000
Amortization of deferred rent - - 150,000
Write-off of deferred rent - - 1,850,000
In-process research and development - - 4,042,640
Changes in assets and liabilities:
Accounts receivable 230,749 1,746,274 (862,047)
Inventory (238,123) 42,378 (2,228,900)
Due from investor - - 286,492
Prepaid expenses and other current assets 53,627 (104,880) (1,015,685)
Accounts payable and accrued expenses (1,498,132) 80,373 4,216,343
Deferred revenue - (1,271,767) 5,213,026
Due to investor - - (286,492)
----------------- ------------------ ------------------
Net cash used in operating activities (15,949,696) (7,757,429) (161,326,246)
----------------- ------------------ ------------------
Cash Flows From Investing Activities:
Purchase of property, plant and equipment (1,358,443) (479,913) (28,673,283)
Proceeds from disposal of property, plant and equipment - - 36,666
Purchase of intangible asset - - (9,624,500)
Investment in affiliate - - (1,500,000)
Marketable securities 3,031,839 15,375,043 (23,659,271)
----------------- ------------------ ------------------
Cash provided by (used in) investing activities 1,673,396 14,895,130 (63,420,388)
----------------- ------------------ ------------------
Cash Flows From Financing Activities:
Proceeds from issuance of common stock - - 140,342,782
Proceeds from initial public offering, net - - 94,611,455
Proceeds from secondary public offering, net - - 52,017,750
Stock issuance costs - - (2,068,776)
Proceeds from stock option exercises 474,730 232,386 7,258,319
Cash placed in escrow - - (5,310,274)
Principal payments on capital lease obligations (26,379) (9,509) (245,899)
Principal payments on long-term debt - - (850,000)
----------------- ------------------ ------------------
Net cash provided by financing activities 448,351 222,877 285,755,357
----------------- ------------------ ------------------
(Decrease) Increase in cash and cash equivalents (13,827,949) 7,360,578 61,008,723
Cash and cash equivalents, beginning of period 58,511,563 53,648,145 -
----------------- ------------------ ------------------
Cash and cash equivalents, end of period $ 44,683,614 $ 61,008,723 $ 61,008,723
================= ================== ==================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
Plug Power Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
1. Nature of Operations
Description of Business
Plug Power Inc. and subsidiary (Company), was originally formed as a
joint venture between Edison Development Corporation (EDC) and Mechanical
Technology Incorporated (MTI) in the State of Delaware on June 27, 1997
and succeeded by merger to all of the assets, liabilities and equity of
Plug Power, L.L.C. in November 1999.
The Company is a development stage enterprise formed to research,
develop, manufacture and distribute on-site electric power generation
systems utilizing proton exchange membrane (PEM) fuel cells for
stationary applications and is in the preliminary stages of field testing
and marketing its initial commercial product to a limited number of
customers, including utilities, government entities and the Company's
distribution partners, GE Fuel Cell Systems, LLC and DTE Energy
Technologies, Inc. This initial product is a limited edition fuel cell
system that is intended to offer complimentary, quality power while
demonstrating the market value of fuel cells as a preferred form of
alternative distributed power generation. Subsequent enhancements to its
fuel cell systems are expected to expand the market opportunity for fuel
cells by lowering the installed cost, decreasing operating and
maintenance costs, increasing efficiency, improving reliability, and
adding features such as grid independence and co-generation of heat and
electric power.
Liquidity
The Company's cash requirements depend on numerous factors, including but
not limited to product development activities, ability to commercialize
its fuel cell systems, market acceptance of its systems and other
factors. The Company expects to continue to devote substantial capital
resources to its development programs directed at commercializing fuel
cell systems worldwide, to hire and train production staff, develop and
expand manufacturing capacity and continue research and development
activities. The Company will pursue expansion of its operations through
internal growth and strategic alliances and expects such activities will
be funded from existing cash and cash equivalents, issuance of additional
equity or debt securities or additional borrowings subject to market and
other conditions.
At March 31, 2002, the Company had unrestricted cash, cash equivalents
and marketable securities in the amount of $84.7 million and working
capital of $81.5 million. Management believes that the Company's current
available cash, cash equivalents and marketable securities will provide
sufficient capital to fund operations for at least the next twelve
months.
2. Basis of Presentation
The accompanying condensed consolidated financial statements include the
accounts of the Company and its subsidiary. All significant intercompany
transactions have been eliminated in consolidation.
Interim Financial Statements The unaudited condensed consolidated
financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, all adjustments, which consist solely of normal recurring
adjustments, necessary to present fairly, in accordance with generally
accepted accounting principles, 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.
6
Certain information and footnote disclosures normally included in annual
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These
unaudited condensed 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, 2001.
Cash Equivalents and Restricted Cash: Cash equivalents consist of money
market accounts, overnight repurchase agreements and certificates of
deposit with an initial term of less than three months. For purposes of
the condensed 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, 2002, the Company has restricted cash in the amount of
$5,310,274, that is required to be placed in escrow to collateralize debt
related to the purchase of real estate. The escrowed amounts are recorded
under the captions, "Restricted cash" in the accompanying condensed
consolidated balance sheets.
Marketable Securities: Marketable securities includes investments in
corporate debt securities and US Treasury obligations which are carried
at fair value. These investments are considered available for sale, and
the difference between the cost and the fair value of these securities
would be reflected in other comprehensive income (loss) and as a separate
component of stockholders' equity. There was no significant difference
between cost and fair value of these investments at March 31, 2002.
Product and Service Revenue: Generally, product and service revenue is
recorded when products are shipped, customer acceptance has occurred and
as other significant contractual obligations are met. The Company applies
the guidance within Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" (SAB 101) in the evaluation of its
contracts to determine when to properly recognize revenue. The Company's
initial commercial sales for the delivery of limited edition fuel cell
systems are contract specific arrangements containing multiple
obligations, that may include a combination of continued service,
maintenance and other support, as well as certain cancellation
privileges.
The Company defers recognition of product and service revenue where all
of the criteria for revenue recognition have not yet been achieved.
Product and service revenue excludes revenue which has been deferred and
is being recognized over the period of the underlying service and other
contractual obligations within the Company's initial commercial
agreements for the delivery of fuel cell systems. At March 31, 2002, the
Company has deferred product and service revenue in the amount of $4.2
million.
Income Taxes: Income taxes are accounted for under the asset and
liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the
enactment date.
Use of Estimates: The condensed consolidated financial statements of the
Company have been prepared in conformity with accounting principles
generally accepted in the United States of America, 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 financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
7
Impact of Recently Issued Accounting Standards: In June 2001, the
Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement
Obligations". SFAS No. 143 requires the Company to record the fair value
of an asset retirement obligation as a liability in the period in which
it incurs a legal obligation associated with the retirement of tangible
long-lived assets that result from the acquisition, construction,
development and/or normal use of the assets. The Company also records a
corresponding asset which is depreciated over the life of the asset.
Subsequent to the initial measurement of the asset retirement obligation,
the obligation will be adjusted at the end of each period to reflect the
passage of time and changes in the estimated future cash flows underlying
the obligation. The Company is required to adopt SFAS No. 143 on January
1, 2003. Management is currently evaluating the impact that the adoption
of SFAS No. 143 will have on the Company's consolidated financial
statements.
3. Loss Per Share
Loss per share for the Company is calculated as follows:
Three months ended
----------------------------------------------------
March 31, 2002 March 31, 2001
------------------------ ------------------------
Numerator:
Net loss $ (11,595,882) $ (19,014,523)
======================== ========================
Denominator:
Weighted average number
of common shares outstanding 50,345,437 43,919,731
======================== ========================
No options or warrants outstanding were included in the calculation of
diluted loss per share because their impact would have been
anti-dilutive.
4. Investments in Affiliates
GE Fuel Cell Systems, LLC
In February 1999, we entered into a joint venture agreement with GE
MicroGen, Inc. to form GE Fuel Cell Systems, LLC (GEFCS), to exclusively
market, sell, install and service our stationary PEM fuel cell systems on
a global basis, with the exception of the states of Illinois, Indiana,
Michigan and Ohio, in which DTE Energy Technologies, Inc., has exclusive
distribution rights. Plug Power has a 40 percent ownership interest in
GEFCS. Under the terms of our distribution agreement with GEFCS, we serve
as GEFCS' exclusive supplier of the PEM fuel cell systems and related
components meeting the specifications set forth in the distribution
agreement. GE MicroGen, Inc. is an indirect wholly owned subsidiary of
General Electric Company that operates within the GE Power Systems
business. We may, under certain circumstances, sell systems directly to
governmental and quasi-governmental entities under the terms of our
distribution agreement with GEFCS. With respect to fuel cell systems that
we do sell directly we will provide, or enter into a subcontract to
provide, product support services directly.
In connection with the formation of GEFCS, and the Company's distribution
agreement with GEFCS, including amendments thereto, the Company issued
2,250,000 shares of its common stock, and an option to purchase 725,000
additional shares of its common stock, to GE MicroGen, Inc. The Company
has capitalized $16.3 million, the fair value of the shares issued and
the option to purchase additional shares under the caption "Investment in
affiliates" in the accompanying condensed consolidated balance sheets.
The investment generally represents an intangible asset in
8
the form of a distribution agreement and is being amortized on a straight
line basis over a ten year period, the term of the original distribution
agreement. In accordance with the terms of the agreement, General
Electric will provide capital, in the form of a loan not to exceed $8.0
million, to fund the operations of GEFCS.
The Company accounts for its interest in GEFCS on the equity method of
accounting and adjusts its investment by its proportionate share of
income or losses under the caption "Equity in losses of affiliates" in
the accompanying condensed consolidated statements of operations. GEFCS
had an operating and net loss of approximately $97,000 for the three
months ended March 31, 2002. For the three months ended March 31, 2002,
equity in losses of affiliates, related to GEFCS, was approximately
$487,000 including amortization of the related intangible asset of
$448,000.
Under a separate agreement, the Company has agreed to source from General
Electric Company technical support services for its product development
effort, including engineering, testing, manufacturing and quality control
services. In addition, the Company has committed to purchase a minimum of
$12.0 million of such services over a five year period, which began
September 30, 1999. Through March 31, 2002, the Company has purchased
approximately $5.5 million of such services. General Electric Company has
agreed to act as the agent in procuring certain equipment, parts and
components and is providing training services to the Company's employees
regarding procurement activities pursuant to this agreement.
Advanced Energy Incorporated
In March 2000, the Company acquired a 28% ownership interest in Advanced
Energy Incorporated (AEI), (formerly Advanced Energy Systems, Inc.), in
exchange for a combination of $1.5 million cash and Plug Power common
stock valued at approximately $828,000. The Company accounts for its
interest in AEI on the equity method of accounting and adjusts its
investment by its proportionate share of income or losses. The amount by
which the purchase price of the Company's ownership interest exceeded the
underlying equity in net assets of AEI at the acquisition date was
approximately $1,773,000 and had been fully amortized as of December 31,
2001. For the three months ended March 31, 2002, AEI had sales of
approximately $674,000 and an operating and net loss of approximately
$439,000. The Company has recorded equity in losses of affiliates,
related to AEI, of $97,000 for the three months ended March 31, 2002
which reduced the carrying value of the Company's investment to zero at
March 31, 2002.
5. Intangible Assets
In June 2001, the FASB issued SFAS No. 141, "Business Combinations",
and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141
requires that the purchase method of accounting be used for all business
combinations. SFAS No. 141 specifies criteria that intangible assets
acquired in a business combination must meet to be recognized and
reported separately from goodwill. The Company adopted the provisions of
SFAS No. 141 as of July 1, 2001.
Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill
and Other Intangible Assets." This statement changed the accounting for
goodwill and indefinite-lived intangible assets from an amortization
approach to an impairment-only approach. Goodwill and intangible assets
with indefinite useful lives are subject to a periodic impairment test.
If the carrying value of goodwill or an intangible asset exceeds its fair
value, an impairment loss shall be recognized. Acquired intangible assets
with determinable useful lives continue to be amortized over their
estimated useful lives in proportion to the economic benefits consumed.
These estimated useful lives are required to be reevaluated each
reporting period. Amortizable intangible assets are to be reviewed for
impairment in accordance with SFAS No. 144.
While the Company has no goodwill or other intangible assets with
indefinite lives, in conjunction with the adoption of SFAS No. 142, the
Company reassessed the useful lives and the classification of its
finite-lived acquired intangible assets and determined that no revisions
were
9
necessary. The gross carrying amount and accumulated amortization of the
Company's acquired intangible assets as of March 31, 2002 and December
31, 2001 were as follows:
March 31, 2002 December 31, 2001
-------------------------------------- ------------------------------------
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
-------------------------------------- ------------------------------------
Distribution Agreement, included
within "Investments in affiliates"
in accompanying unaudited
condensed consolidated balance
sheets $16,250,000 $ 4,006,900 $16,250,000 $3,559,000
Purchased Technology, included
with "Intangible assets" in
accompanying unaudited condensed
consolidated balance sheets 9,267,500 6,435,775 9,267,500 5,797,361
-------------------------------------- ------------------------------------
Total $25,517,500 $10,442,675 $25,517,500 $9,356,361
====================================== ====================================
Amortization expense for acquired intangible assets during the quarter
ended March 31, 2002 was $1,125,267. Estimated amortization expense for
the remainder of 2002 and the five succeeding years are as follows:
Estimated
Amortization Expense
---------------------
2002 (remainder) $ 3,661,000
2003 2,306,000
2004 1,792,000
2005 1,792,000
2006 1,792,000
2007 1,792,000
6. Stockholders' Equity
Changes in stockholders' equity for the three months ended March 31, 2002
is as follows:
Deficit
Accumulated
Common Stock During the Total
------------ Development Stockholders'
Shares Amount Paid-in Capital Stage Equity
---------------------------------------------------------------------------------------
Balance, December 31, 2001 50,322,928 $ 503,229 $ 342,842,203 $ (208,342,541) $ 135,002,891
10
Stock based compensation 30,891 309 568,830 569,139
Stock option exercises 45,831 459 231,927 232,386
Net loss (11,595,882) (11,595,882)
---------------------------------------------------------------------------------------
Balance, March 31, 2002 50,399,650 $ 503,997 $ 343,642,960 $(219,938,423) $ 124,208,534
=======================================================================================
7. Commitments and Contingencies
Litigation:
On or about September 14, 2000, a shareholder class action complaint was
filed in the federal district court for the Eastern District of New York
alleging that we and various of our officers and a director violated
certain federal securities laws by failing to disclose certain
information concerning our products and future prospects. The action was
brought on behalf of a class of purchasers of Plug Power stock who
purchased the stock between February 14, 2000 and August 2, 2000.
Subsequently, fourteen additional complaints with similar allegations and
class periods were filed. By order dated October 30, 2000, the court
consolidated the complaints into one action, entitled Plug Power Inc.
Securities Litigation, CV-00-5553 (ERK) (RML). By order dated January 25,
2001, the Court appointed lead plaintiffs and lead plaintiffs' counsel.
Subsequently the plaintiffs served a consolidated amended complaint,
whichextends the class period to begin on October 29, 1999, and alleges
claims under Sections 11, 12 and 15 of the Securities Act of 1933 and
Sections 10(b) and 20(a) of the Exchange Act of 1934, and Rule 10b-5
promulgated thereunder by the Securities & Exchange Commission, 17 C.F.R.
240 10b-5. Subsequently, Plaintiffs withdrew their claims under the
Securities Act of 1933. Plaintiffs allege that the defendants made
misleading statements and omissions regarding the state of development of
the Company's technology in a registration statement and proxy statement
issued in connection with the Company's initial public offering and in
subsequent press releases, and are seeking damages. The Company believes
that the allegations in the consolidated amended complaint are without
merit and intend to vigorously defend against the claims. The Company
does not believe that the outcome of these actions will have a material
adverse effect upon its financial position, results of operations or
liquidity; however, litigation is inherently uncertain and there can be
no assurances as to the ultimate outcome or effect of these actions. If
Plaintiffs were to prevail, such an outcome would have a material adverse
effect on our financial condition, results of operation and liquidity.
11
MANAGEMENT'S DISCUSSION AND ANAYLSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying unaudited condensed consolidated financial statements and notes
thereto included within this report, and our audited consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K filed
for the fiscal year ended December 31, 2001. In addition to historical
information, this Form 10-Q and the following discussion contain forward-looking
statements that reflect our plans, estimates, intentions, expectations and
beliefs. Our actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those set forth under the caption
"Factors Affecting Future Results" in our Annual Report on Form 10-K filed for
the fiscal year ended December 31, 2001.
Overview
We are a development stage enterprise formed to research, develop, manufacture
and distribute on-site electric power generation systems utilizing proton
exchange membrane (PEM) fuel cells for stationary applications. We are in the
preliminary stages of field testing and marketing our initial commercial product
to a limited number of customers, including utilities, government entities and
our distribution partners, GE Fuel Cell Systems, LLC and DTE Energy
Technologies, Inc.
We continue to advance the development of our product and have significantly
reduced the unit cost, size, weight and part count of our fuel cell systems.
Since inception, we have devoted substantially all of our resources toward the
development of our PEM fuel cell systems. Our research and development facility
contains over 150 test stations where we conduct design optimization and
verification testing, rapid-aging testing, failure mode and effects analysis,
multiple technology evaluations, and endurance testing in our effort to
accelerate the development and commercialization of our fuel cell systems.
Through March 31, 2002, our stockholders in the aggregate have contributed
$292.2 million in cash, including $93.0 million in net proceeds from our initial
public offering and $51.6 million in net proceeds from our follow-on public
offering of common stock, and $33.4 million in other contributions, consisting
of in-process research and development, real estate, other in-kind contributions
and equity interests in affiliates.
From inception through March 31, 2002, we have incurred losses of $219.9 million
and expect to continue to incur losses as we continue our product development
and commercialization programs and prepare for the commencement of manufacturing
operations. We expect that losses will fluctuate from quarter to quarter and
that such fluctuations may be substantial as a result of, among other factors,
the number of systems we produce and install, the related service requirements
necessary to monitor those systems and potential design changes required as a
result of field testing.
Acquisitions, Strategic Relationships and Development Agreements
Since our inception, we have formed strategic relationships with suppliers of
key components, developed distributor and customer relationships, and entered
into development and demonstration programs with electric utilities, government
agencies and other energy providers.
12
GE Entities: In February 1999, we entered into a joint venture agreement with GE
MicroGen, Inc. to form GE Fuel Cell Systems, LLC (GEFCS), to exclusively market,
sell, install and service our stationary PEM fuel cell systems on a global
basis, with the exception of the states of Illinois, Indiana, Michigan and Ohio,
in which DTE Energy Technologies, Inc., has exclusive distribution rights. Plug
Power has a 40 percent ownership interest in GEFCS. Under the terms of our
distribution agreement with GEFCS, we serve as GEFCS' exclusive supplier of the
PEM fuel cell systems and related components meeting the specifications set
forth in the distribution agreement. GE MicroGen, Inc. is a wholly owned
subsidiary of General Electric Company that operates within the GE Power Systems
business. We may, under certain circumstances, sell systems directly to
governmental and quasi-governmental entities under the terms of our distribution
agreement with GEFCS. With respect to fuel cell systems that we do sell directly
we will provide, or enter into a subcontract to provide, product support
services directly.
Under a separate agreement, the Company has agreed to source from General
Electric Company technical support services for its product development effort,
including engineering, testing, manufacturing and quality control services. The
Company has committed to purchase a minimum of $12.0 million of such services
over a five year period, which began September 30, 1999. Through March 31, 2002,
the Company has purchased approximately $5.5 million of such services. Pursuant
to this agreement General Electric also acts as the agent in procuring certain
equipment, parts and components and is providing training services to the
Company's employees regarding procurement activities.
Gastec: In February 2000, we acquired from Gastec, NV, a Netherlands-based
company, certain fixed assets and all of its intellectual property related to
fuel processor development for fuel cell systems capable of producing up to 100
kW of electric power. The total purchase price was $14.8 million, paid in cash.
In connection with the transaction, we recorded in-process research and
development expense in the amount of $5.0 million, fixed assets in the amount of
$192,000 and intangible assets in the amount of $9.6 million. Through March 31,
2002, we have expensed $6.8 million related to the intangible assets.
Vaillant: In March 2000, we finalized a development agreement with Vaillant GmbH
(Vaillant), to develop a combination furnace, hot water heater and fuel cell
system that will provide both heat and electricity for the home. Under the
agreement, Vaillant will obtain fuel cells and gas-processing components from
GEFCS and then will produce the fuel cell heating appliances for its customers
in Germany, Austria, Switzerland and the Netherlands, and for GEFCS customers
throughout Europe. In March 2002, we amended our agreements with Vaillant to
extend their distribution territory to include all of Europe on a non-exclusive
basis.
Celanese: In April 2000, we finalized a joint development agreement with
Celanese GmbH, to develop a high temperature membrane electrode unit. Under the
agreement, we and Celanese will exclusively work together on the development of
a high temperature membrane electrode unit for our stationary fuel cell system
applications. As part of the agreement we will contribute an estimated $4.1
million (not to exceed $4.5 million) to fund our share of the development
efforts over the course of the agreement. As of March 31, 2002, we have
contributed $1.5 million under the terms of the agreement and have accrued an
additional $1.8 million. These amounts have been expensed and represent our
estimated share of the development efforts performed to date. We are in the
process of negotiating an extension and revision of the terms of our agreement
with Celanese.
Engelhard: In June 2000, we finalized a joint development agreement and a supply
agreement with Engelhard Corporation for development and supply of advanced
catalysts to increase the overall performance and efficiency of our fuel
processor. Over the course of the agreements we will contribute $10.0 million to
fund Engelhard's development efforts, and Engelhard will acquire $10.0 million
of our common stock. The agreements also specify rights and obligations for
Engelhard to supply products to us over the next 10 years. Through March 31,
2002, we have contributed a total of $8.0 million under the
13
terms of the agreement while Engelhard has acquired $8.0 million of our common
stock. Of this amount, $6.6 million has been expensed with the remaining $1.4
million being recorded under the balance sheet caption "Prepaid development
costs" as of March 31, 2002.
Advanced Energy Incorporated: In March 2000, we acquired a 28% ownership
interest in Advanced Energy Incorporated, in exchange for a combination of $1.5
million in cash and our common stock valued at approximately $828,000. We
account for our interest in Advanced Energy Incorporated on the equity method of
accounting and adjust our investment by our proportionate share of income or
losses.
Results of Operations
Comparison of the Three Months Ended March 31, 2002 and March 31, 2001.
Product and service revenue. Product and service revenue was $2.6 million for
the three months ended March 31, 2002. There was no product and service revenue
during the same period last year. In the third quarter of last year we began
delivering fuel cell systems under our initial commercial agreements to a select
number of customers in order to demonstrate, test and evaluate our fuel cell
systems. In the first quarter of 2002, we delivered 12 fuel cell systems to
these select customers. Under our initial commercial agreements we are
recognizing revenue over the period of the underlying service and other
contractual obligations. During the quarter ended March 31, 2002 we have
recognized revenue in the amount of $2.4 million associated with the delivery of
fuel cell systems that occurred in 2001 and $0.2 million associated with the
delivery of fuel cell systems that occurred in the first quarter of 2002. Also
during the quarter we deferred an additional $1.1 million related to the
delivery of 12 fuel cell systems in the first quarter of 2002. As of March 31,
2002, we have total deferred revenue in the amount of $4.2 million and expect to
recognize approximately $4.1 million throughout the remainder of 2002. The costs
associated with the product, service and other obligations are expensed as they
are incurred.
Research and development contract revenue. Research and development contract
revenue primarily relates to cost reimbursement government contracts related to
the development of PEM fuel cell technology. Research and development contract
revenue decreased to $332,000 for the three months ended March 31, 2002 from
$1.0 million during the same period last year. The decrease is the result of
completion of government contracts with the U.S. Department of Energy and New
York State Energy Research and Development Authority. Although we intend to
continue certain government contract work, we expect our primary focus to be on
introducing our product to the commercial marketplace.
Cost of revenues. Cost of revenues for the three months ended March 31, 2002,
decreased to $1.7 million from $2.0 million during the same period last year.
Cost of revenues includes the direct cost incurred in the manufacture of our
products as well as costs incurred for product maintenance, replacement parts
and service under our contractual obligations. These costs consist primarily of
productive materials and fees paid to outside suppliers for subcontracted
components and services.
Cost of revenues also includes costs associated with research and development
contracts including: compensation and benefits for engineering and related
support staff, fees paid to outside suppliers for subcontracted components and
services, fees paid to consultants for services provided, materials and supplies
used and other directly allocable general overhead costs allocated to specific
government contracts.
Noncash research and development expense. Noncash research and development
expense was $69,000 for the three months ended March 31, 2002. There was no
noncash research and development expense during the same period last year.
Noncash research and development expense represents the fair value of stock
grants to employees and stock grants and vested stock options to consultants and
others in exchange for services provided.
14
Other Research and development expense. Other research and development expense
decreased to $10.9 million for the three months ended March 31, 2002 from $16.8
million for the three months ended March 31, 2001. Research and development
expense includes: materials to build development and prototype units,
compensation and benefits for the engineering and related staff, expenses for
contract engineers, fees paid to outside suppliers for subcontracted components
and services, 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.
Research and development expenses in the first quarter ended March 31, 2002 also
includes amortization of prepaid development expenses in the amount of $377,000,
compared to $2.1 million during the same period last year, under our joint
development programs with Engelhard and Celanese, recorded on our balance sheet
under the caption "Prepaid development costs" as well as amortization in the
amount of $638,000, compared to $839,000 during the same period last year,
related to the portion of the Gastec purchase price which has been capitalized
and recorded on our balance sheet under the caption "Intangible assets".
The remainder of the decrease is the result of producing fewer units for
internal test and evaluation purposes combined with a smaller workforce during
the first quarter ended March 31, 2002 than during the same period last year.
Noncash general and administrative expense. Noncash general and administrative
expenses were $343,000 for the three months ended March 31, 2002. There were no
such charges during the same period last year. Noncash general and
administrative expenses generally represents the fair value of stock grants to
employees and stock grants and vested stock options to consultants and others in
exchange for services provided.
Other general and administrative expense. Other general and administrative
expenses decreased to $1.4 million for the three months ended March 31, 2002
from $1.9 million for the three months ended March 31, 2001. The decrease is
primarily the result of more efficient spending in support of operations. Other
general and administrative expense includes compensation, benefits and related
costs in support of our general corporate functions including general
management, finance and accounting, human resources, marketing, information
technology and legal services.
Interest expense. Interest expense was $25,000 for the three months ended March
31, 2002, compared to $78,000 for the same period last year. Interest expense
consists of interest on our long-term obligation related to the purchase of real
estate and interest paid on capital lease obligations.
Interest income. Interest income consisting of interest earned on our cash, cash
equivalents and marketable securities decreased to $487,000 for the three months
ended March 31, 2002, from $1.3 million for the same period in 2001. The
decrease was due to a lower yield on our investment portfolio during a period of
generally declining interest rates. The higher interest earned in 2001 was the
result of better yields on investments purchased during 2000 with maturities in
the second half of 2001.
Equity in losses of affiliates. Equity in losses of affiliates decreased to
$584,000 for the three months ended March 31, 2002 from $646,000 during the same
period last year. Equity in losses of affiliates, which we account for under the
equity method of accounting, is our proportionate share of the losses of GE Fuel
Cell Systems and Advanced Energy Incorporated in the amount of $136,000 and
amortization of intangible assets in the amount of $448,000.
Income taxes. We did not report a benefit for federal and state income taxes in
the consolidated financial statements as the deferred tax asset generated from
our net operating loss has been offset by a full
15
valuation allowance because it is more likely than not that the tax benefits of
the net operating loss carryforward may not be realized.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles and related disclosure requires management to make
estimates and assumptions that affect:
... the amounts reported for assets and liabilities;
... the disclosure of contingent assets and liabilities at the date of the
financial statements; and
... the amounts reported for revenues and expenses during the reporting period.
Specifically, management must use estimates in determining the economic useful
lives of assets, including identifiable intangibles, and various other recorded
or disclosed amounts. Therefore, the Company's financial statements and related
disclosure are necessarily affected by these estimates. Management evaluates
these estimates on an ongoing basis, utilizing historical experience and other
methods considered reasonable in the particular circumstances. Nevertheless,
actual results may differ significantly from estimates. To the extent that
actual outcomes differ from estimates, or additional facts and circumstances
cause management to revise estimates, the Company's financial position as
reflected in its financial statements will be affected. Any effects on business,
financial position or results of operations resulting from revisions to these
estimates are recorded in the period in which the facts that give rise to the
revision become known.
Management believes that the following are the Company's most critical
accounting policies affected by the estimates and assumptions the Company must
make in the preparation of its financial statements and related disclosure:
Revenue recognition: We are a development stage enterprise in the beginning
stages of field testing and marketing our initial commercial products to a
limited number of customers, including utilities, government entities and our
distribution partners. This initial product is a limited edition fuel cell
system ("System" or "Unit") that is intended to offer complimentary, quality
power while demonstrating the market value of fuel cells as a preferred form of
alternative distributed power generation. Subsequent enhancements to our Systems
are expected to expand the market opportunity for fuel cells by lowering the
installed cost, decreasing operating and maintenance costs, increasing
efficiency, improving reliability, and adding features such as grid independence
and co-generation and uninterruptible power supply (UPS) applications.
We apply the guidance within Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" (SAB 101) to our initial sales contracts to
determine when to properly recognize revenue. Our initial commercial sales are
contract specific arrangements containing multiple obligations, that may include
a combination of continued service, maintenance and other support, as well as
cancellation privileges. Presently, we defer recognition of product and service
revenue where all of the criteria for revenue recognition have not yet been
achieved.
For the quarter ended March 31, 2002, we recognized product and service revenue
in the amount of $2.6 million and deferred recognition of product and service
revenue in the amount of $1.1 million. The deferred revenue is being recognized
over the contractual period of the underlying service and other contractual
obligations. The costs associated with the product, service and other
obligations are expensed as they are incurred.
16
As we gain commercial experience, including field experience relative to service
and warranty based on the sales of our initial products, the fair values for the
multiple elements within our future contracts may become determinable and we
may, in future periods, recognize revenue upon delivery of the Unit or we may
continue to defer recognition, based on application of appropriate guidance
within the existing authoritative literature.
Valuation of long-lived and intangible assets and goodwill: We assess the
impairment of identifiable intangible and long-lived assets and related
goodwill, if any, whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Factors we consider important which could
trigger an impairment review include, but are not limited to, the following:
... significant underperformance relative to expected historical or projected
future operating results;
... significant changes in the manner of our use of the acquired assets or the
strategy for our overall business;
... significant negative industry or economic trends;
... significant decline in our stock price for a sustained period; and
... our market capitalization relative to net book value.
When we determine that the carrying value of intangibles, long-lived assets and
related goodwill may not be recoverable based upon the existence of one or more
of the above indicators of impairment, we would measure any impairment based
upon the provisions of Statement of Financial Accounting Standards ("SFAS") No.
142, "Goodwill and Other Intangible Assets". Effective January 1, 2002, the
Company adopted SFAS No. 142. This statement changed the accounting for goodwill
and indefinite-lived intangible assets from an amortization approach to an
impairment-only approach. Goodwill and intangible assets with indefinite useful
lives are subject to a periodic impairment test. If the carrying value of
goodwill or an intangible asset exceeds its fair value, an impairment loss shall
be recognized. Acquired intangible assets with determinable useful lives
continue to be amortized over their estimated useful lives in proportion to the
economic benefits consumed. These estimated useful lives are required to be
reevaluated each reporting period. Amortizable intangible assets are to be
reviewed for impairment in accordance with SFAS No. 144. In conjunction with the
adoption of SFAS No. 142, the Company reassessed the useful lives and the
classification of its finite-lived acquired intangible assets and determined
that no revisions were necessary.
Accounting for income taxes: As part of the process of preparing our
consolidated financial statements, we are required to estimate our income taxes
in each of the jurisdictions in which we operate. This process involves the
estimation of our actual current tax exposure together with assessing temporary
differences resulting from differing treatment of items for tax and accounting
purposes. Included in this assessment is the determination of the net operating
loss carryforward that has resulted from our cumulative net operating loss since
inception. These differences result in a net deferred tax asset. We must assess
the likelihood that our deferred tax assets will be recovered from future
taxable income and to the extent that we believe that recovery is not likely, we
must establish a valuation allowance. To the extent we establish a valuation
allowance or increase this allowance in a period, we must include an expense
within the tax provision in the consolidated statement of operations.
Significant management judgment is required in determining our provision for
income taxes, our deferred tax assets and liabilities and any valuation
allowance recorded against our net deferred tax assets. We recorded a valuation
allowance due to uncertainties related to our ability to utilize the net
deferred tax assets, primarily consisting of net operating losses and credits
which may be carried forward, before they expire. In the event that actual
results differ from these estimates or we adjust these estimates in future
periods, we may need to adjust the recorded valuation allowance which could
materially impact our financial position and results of operations. At March 31,
2002, our net deferred tax assets have been
17
offset in full by a valuation allowance. As a result the net provision for
income taxes is zero at March 31, 2002.
Liquidity and Capital Resources
Summary
Our cash requirements depend on numerous factors, including completion of our
product development activities, ability to commercialize our fuel cell systems,
market acceptance of our systems and other factors. We expect to devote
substantial capital resources to continue our development programs directed at
commercializing our fuel cell systems for worldwide use, hire and train our
production staff, develop and expand our manufacturing capacity and production
activities and expand our research and development activities. We expect to
pursue the expansion of our operations through internal growth and strategic
acquisitions and expect that such activities will be funded from existing cash
and cash equivalents, issuance of additional equity or debt securities or
additional borrowings subject to market and other conditions. The failure to
raise the funds necessary to finance our future cash requirements or consummate
future acquisitions could adversely affect our ability to pursue our strategy
and could negatively affect our operations in future periods. We anticipate
incurring substantial additional losses over at least the next several years and
believe that our current cash, cash equivalents and marketable securities
balances will provide sufficient capital to funds operations for at least the
next twelve months.
We have financed our operations through March 31, 2002 primarily from the sale
of equity, which has provided cash in the amount of $292.2 million. As of March
31, 2002, we had unrestricted cash and cash equivalents and marketable
securities totaling $84.7 million and working capital of $81.5 million. As a
result of our purchase of real estate we have escrowed an additional $5.3
million in cash to collateralize the debt assumed on the purchase. Since
inception, net cash used in operating activities has been $161.3 million and
cash used in investing activities has been $63.4 million.
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk
The Company believes there have been no material changes in the Company's
interest rate risk position since December 31, 2001. Other types of market risk,
such as foreign exchange rate risk and commodity price risk, do not arise in the
normal course of the Company's business activities.
18
Part II - Other Information
ITEM 1 - LEGAL PROCEEDINGS
- --------------------------
On or about September 14, 2000, a shareholder class action complaint was filed
in the federal district court for the Eastern District of New York alleging that
we and various of our officers and a director violated certain federal
securities laws by failing to disclose certain information concerning our
products and future prospects. The action was brought on behalf of a class of
purchasers of Plug Power stock who purchased the stock between February 14, 2000
and August 2, 2000. Subsequently, fourteen additional complaints with similar
allegations and class periods were filed. By order dated October 30, 2000, the
court consolidated the complaints into one action, entitled Plug Power Inc.
Securities Litigation, CV-00-5553 (ERK) (RML). By order dated January 25, 2001,
the Court appointed lead plaintiffs and lead plaintiffs' counsel. Subsequently
the plaintiffs served a consolidated amended complaint, which extends the class
period to begin on October 29, 1999, and alleges claims under Sections 11, 12
and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by the Securities &
Exchange Commission, 17 C.F.R. 240 10b-5. Subsequently, Plaintiffs withdrew
their claims under the Securities Act of 1933. Plaintiffs allege that the
defendants made misleading statements and omissions regarding the state of
development of the Company's technology in a registration statement and proxy
statement issued in connection with the Company's initial public offering and in
subsequent press releases, and are seeking damages. The Company believes that
the allegations in the consolidated amended complaint are without merit and
intend to vigorously defend against the claims. The Company does not believe
that the outcome of these actions will have a material adverse effect upon its
financial position, results of operations or liquidity; however, litigation is
inherently uncertain and there can be no assurances as to the ultimate outcome
or effect of these actions. If Plaintiffs were to prevail, such an outcome would
have a material adverse effect on our financial condition, results of operation
and liquidity.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
Certain exhibits indicated below are incorporated by reference to documents of
Plug Power on file with the Commission. Exhibits nos. 10.25, 10.28, 10.29,
10.30, 10.31, 10.32, 10.33, 10.34, 10.41, 10.38, 10.42 and 10.43 represent the
management contracts or compensation plans filed pursuant to Item 14(c) of the
Form 10-K.
Exhibit No. and Description
---------------------------
2.1 Agreement and Plan of Merger by and between Plug Power and Plug
Power, LLC, a Delaware limited liability company, dated as of
October 7, 1999. (1)
3.1 Amended and Restated Certificate of Incorporation of Plug Power.
(2)
3.2 Amended and Restated By-laws of Plug Power. (2)
19
3.3 Certificate of Amendment to Amended and Restated Certificate of
Incorporation of Plug Power. (3)
4.1 Specimen certificate for shares of common stock, $.01 par value,
of Plug Power. (1)
10.1 Amended and Restated Limited Liability Company Agreement of GE
Fuel Cell Systems, LLC, dated February 3, 1999, between GE On-Site
Power, Inc. and Plug Power, LLC. (1)
10.2 Contribution Agreement, dated as of February 3, 1999, by and
between GE On-Site Power, Inc. and Plug Power, LLC. (1)
10.3 Trademark and Trade Name Agreement, dated as of February 2, 1999,
between General Electric Company and GE Fuel Cell Systems, LLC. (1)
10.4 Trademark Agreement, dated as of February 2, 1999, between Plug
Power LLC and GE Fuel Cell Systems, LLC. (1)
10.5 Distributor Agreement, dated as of February 2, 1999, between GE
Fuel Cell Systems, LLC and Plug Power, LLC. (1)
10.6 Side letter agreement, dated February 3, 1999, between General
Electric Company and Plug Power LLC. (1)
10.7 Mandatory Capital Contribution Agreement, dated as of January 26,
1999, between Edison Development Corporation, Mechanical Technology
Incorporated and Plug Power, LLC and amendments thereto, dated August
25, 1999 and August 26, 1999. (1)
10.8 LLC Interest Purchase Agreement, dated as of February 16, 1999,
between Plug Power, LLC and Michael J. Cudahy. (1)
10.9 Warrant Agreement, dated as of February 16, 1999, between Plug
Power, LLC and Michael J. Cudahy and amendment thereto, dated July 26,
1999. (1)
10.10 LLC Interest Purchase Agreement, dated as of February 16, 1999,
between Plug Power, LLC and Kevin Lindsey. (1)
10.11 LLC Interest Purchase Agreement, dated as of April 1, 1999,
between Plug Power, LLC and Antaeus Enterprises, Inc. (1)
10.12 LLC Interest Purchase Agreement, dated as of April 9, 1999,
between Plug Power, LLC and Southern California Gas Company. (1)
10.13 Warrant Agreement, dated as of April 9, 1999, between Plug
Power, LLC and Southern California Gas Company and amendment thereto,
dated August 26, 1999. (1)
10.14 Agreement, dated as of June 26, 1997, between the New York State
Energy Research and Development Authority and Plug Power LLC, and
amendments thereto dated as of December 17, 1997 and March 30, 1999.
(1)
10.15 Agreement, dated as of January 25, 1999, between the New York
State Energy Research and Development Authority and Plug Power LLC. (1)
20
10.16 Agreement, dated as of September 30, 1997, between Plug Power
LLC and the U.S. Department of Energy. (1)
10.17 Cooperative Agreement, dated as of September 30, 1998, between
the National Institute of Standards and Technology and Plug Power,
LLC, and amendment thereto dated May 10, 1999. (1)
10.18 Joint venture agreement, dated as of June 14, 1999 between Plug
Power, LLC, Polyfuel, Inc., and SRI International. (1)
10.19 Cooperative Research and Development Agreement, dated as of
February 12, 1999, between Plug Power, LLC and U.S. Army Benet
Laboratories. (1)
10.20 Nonexclusive License Agreement, dated as of April 30, 1993,
between Mechanical Technology Incorporated and the Regents of the
University of California. (1)
10.21 Development Collaboration Agreement, dated as of July 30, 1999,
by and between Joh. Vaillant GMBH. U. CO. and Plug Power, LLC. (1)
10.22 Agreement of Sale, dated as of June 23, 1999, between Mechanical
Technology, Incorporated and Plug Power LLC. (1)
10.23 Assignment and Assumption Agreement, dated as of July 1, 1999,
between the Town of Colonie Industrial Development Agency, Mechanical
Technology, Incorporated, Plug Power, LLC, KeyBank, N.A., and First
Albany Corporation. (1)
10.24 Replacement Reimbursement Agreement, dated as of July 1, 1999,
between Plug Power, LLC and KeyBank, N.A. (1)
10.25 1997 Membership Option Plan and amendment thereto dated
September 27, 1999. (1)
10.26 Trust Indenture, dated as of December 1, 1998, between the Town
of Colonie Industrial Development Agency and Manufacturers and Traders
Trust Company, as trustee. (1)
10.27 Distribution Agreement, dated as of June 27, 1997, between Plug
Power, LLC and Edison Development Corporation and amendment thereto
dated September 27, 1999. (1)
10.28 Agreement, dated as of June 27, 1999, between Plug Power, LLC
and Gary Mittleman. (1)
10.29 Agreement, dated as of June 8, 1999, between Plug Power, LLC and
Louis R. Tomson. (1)
10.30 Agreement, dated as of August 6, 1999, between Plug Power, LLC
and Gregory A. Silvestri. (1)
10.31 Agreement, dated as of August 12, 1999, between Plug Power, LLC
and William H. Largent. (1)
10.32 Agreement, dated as of August 20, 1999, between Plug Power, LLC
and Dr. Manmohan Dhar. (1)
10.33 1999 Stock Option and Incentive Plan. (1)
21
10.34 Employee Stock Purchase Plan. (1)
10.35 Agreement, dated as of August 27, 1999, by Plug Power, LLC, Plug
Power Inc., GE On-Site Power, Inc., GE Power Systems Business of General
Electric Company, and GE Fuel Cell Systems, L.L.C. (1)
10.36 Registration Rights Agreement to be entered into by the Registrant
and the stockholders of the Registrant. (2)
10.37 Registration Rights Agreement to be entered into by Plug Power,
L.L.C. and GE On-Site Power, Inc. (2)
10.38 Agreement dated September 11, 2000, between Plug Power Inc. and Gary
Mittleman. (3)
10.39 Amendment No. 1 to Distributor Agreement dated February 2, 1999,
between GE Fuel Cell Systems L.L.C. and Plug Power Inc. (3)
10.40 Amendment to Distributor Agreement dated February 2, 1999, made as of
July 31, 2000, between GE Fuel Cell Systems L.L.C. and Plug Power Inc. (3)
10.41 Agreement, dated as of December 15, 2000, between Plug Power Inc. and
Roger Saillant. (3)
10.42 Agreement dated February 13, 2001, between Plug Power Inc. and
William H. Largent. (3)
10.43 Amendment dated September 19, 2000 to agreement, dated as of August
6, 1999, between Plug Power Inc. and Gregory A. Silvestri. (3)
10.44 Joint Development Agreement, dated as of June 2, 2000, between Plug
Power Inc. and Engelhard Corporation. (3)
10.45 Amended and Restated Limited Liability Company Agreement of GE Fuel
Cell Systems, L.L.C. dated August 21, 2001, between GE MicroGen, Inc. and
Plug Power Inc. (4)
10.46 Side Letter, dated August 21, 2001, to Amended and Restated Limited
Liability Company Agreement of GE Fuel Cell Systems, L.L.C. between GE
MicroGen, Inc. and Plug Power Inc. (4)
10.47 First Amendment, dated July 25, 2001, to Registration Rights
Agreement entered into by Plug Power, L.L.C. and GE On-Site Power, Inc.(4)
10.48 Amended and Restated Distribution Agreement, dated as of August 21,
2001, between GE Fuel Cell Systems, LLC and Plug Power, LLC (4)(5)
10.49 Investment Agreement dated July 25, 2001, by and between Plug
Power Inc. GE Power Systems Equities Inc. (4)
10.50 Option to Purchase Common Stock of Plug Power Inc. by GE Power
Systems Equities, Inc., dated August 21, 2001 (4)
10.51 Services Agreement, dated March 17, 2000, between Plug Power
Inc. and General Electric Company (4)(5)
10.52 Amendment, dated September 18, 2000, to the Services Agreement
between Plug Power Inc. and General Electric Company (4)
10.53 Amendment, dated December 31, 2000, to the Services Agreement
between Plug Power Inc. and General Electric Company (4)
10.54 Amendment, dated March 31, 2001, to the Services Agreement
between Plug Power Inc. and General Electric Company (4)
10.55 Amendment No.1, dated February 27, 2002, to Services Agreement,
between Plug Power Inc. and GE Microgen (f/k/a GE On-Site Power) (4)
(1) Incorporated by reference to the Company's Registration Statement on
Form S-1 (File Number 333-86089).
(2) Incorporated by reference to the Company's Form 10-K for the period
ending December 31, 1999.
(3) Incorporated by reference to the Company's Form 10-K for the period
ending December 31, 2000.
(4) Incorporated by reference to the Company's Form 10-K for the period
ending December 31, 2001.
B) Reports on Form 8-K.
None.
22
Signature
- ----------
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: May 10, 2002 by: /s/ Roger Saillant
----------------------
Roger Saillant
Chief Executive Officer
by: /s/ W. Mark Schmitz
----------------------
W. Mark Schmitz
Chief Financial Officer
23