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 delivery of the hydrogen fuel, continued development 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 addition 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 its 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.

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 delivery of the hydrogen fuel, continued development 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 addition 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 its 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.