Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

The Equipment Sale Agreement Addendum No. 1 between Ballard and the Company was executed on June 30, 2011. This addendum relates to a committed purchase by the Company of a total of 3,250 Ballard fuel cell stacks between the dates of July 1, 2011 and December 31, 2012. The amount of this commitment was approximately $9.4 million.  As of March 31, 2012, the Company had purchased 1,347 stacks, and has a remaining commitment of approximately $5.1 million.  In conjunction with this agreement, the Company paid a one-time non-recurring engineering fee of $450,000 to Ballard to be used at Ballard’s sole discretion for the purposes of product development, cost reduction and production implementation.  This fee is being amortized to research and development expense over a period of eighteen months.

Concentrations of credit risk with respect to receivables exist due to the limited number of select customers that the Company has initial commercial sales arrangements with and with government agencies. To mitigate credit risk, the Company performs appropriate evaluation of a prospective customer’s financial condition.

At March 31, 2012, four customers comprise approximately 84.2% of the total accounts receivable balance, with each customer individually representing 42.8%, 22.5%, 10.7%, and 8.2% of total accounts receivable, respectively. At December 31, 2011, five customers comprise approximately 83.0% of the total accounts receivable balance, with each customer individually representing 27.0%, 17.3%, 16.4%, 12.1% and 10.2% of total accounts receivable, respectively. 

For the three months ended March 31, 2012, contracts with two customers comprise approximately 58.7% of total consolidated revenues, with each customer representing 48.1% and 10.6%, respectively.  For the three months ended March 31, 2011, contracts with two customers comprise approximately 61.9% of total consolidated revenues, with each customer representing 44.4% and 17.5%, respectively .