Plug Power Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net revenue:
Sales of fuel cell systems and related infrastructure	$	115,999	$	83,662	$	262,049	$	151,876
Services performed on fuel cell systems and related infrastructure		6,677		6,829		18,397		19,586
Power Purchase Agreements		9,321		6,629		25,508		19,629
Fuel delivered to customers		11,556		9,831		33,804		24,536
Other		369		97		679		235
Net revenue		143,922		107,048		340,437		215,862
Cost of revenue:
Sales of fuel cell systems and related infrastructure		89,235		69,428		198,122		117,290
Services performed on fuel cell systems and related infrastructure		18,697		9,180		47,258		27,300
Provision for loss contracts related to service		7,462		25,147		15,641		25,948
Power Purchase Agreements		31,199		14,744		71,776		44,019
Fuel delivered to customers		27,857		17,002		90,331		39,332
Other		550		131		856		275
Total cost of revenue		175,000		135,632		423,984		254,164

Gross loss		(31,078)		(28,584)		(83,547)		(38,302)

Operating expenses:
Research and development		16,634		7,386		37,623		17,033
Selling, general and administrative		42,421		17,210		106,652		49,963
Change in fair value of contingent consideration		8,530		1,130		8,760		1,130
Total operating expenses		67,585		25,726		153,035		68,126

Operating loss		(98,663)		(54,310)		(236,582)		(106,428)

Interest, net		(5,361)		(17,248)		(27,895)		(42,407)
Other expense, net		(50)		(303)		(318)		(452)
Realized loss on investments, net		(254)		—		(236)		—
Change in fair value of equity securities		(607)		—		(284)		—
Gain on extinguishment of debt		—		—		—		13,222
Loss on equity method investments		(1,736)		—		(1,736)		—

Loss before income taxes	$	(106,671)	$	(71,861)	$	(267,051)	$	(136,065)

Income tax benefit		—		6,644		—		24,015

Net loss attributable to the Company	$	(106,671)	$	(65,217)	$	(267,051)	$	(112,050)

Preferred stock dividends declared		—		—		—		(26)

Net loss attributable to common stockholders	$	(106,671)	$	(65,217)	$	(267,051)	$	(112,076)

Net loss per share:
Basic and diluted	$	(0.19)	$	(0.18)	$	(0.48)	$	(0.34)

Weighted average number of common stock outstanding		574,520,806		371,010,544		551,894,779		330,949,265

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial ~~statements.~~statements

Table of Contents

Plug Power Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

Net loss attributable to the Company	$	(106,671)	$	(65,217)	$	(267,051)	$	(112,050)
Other comprehensive gain (loss):
Foreign currency translation (loss) gain		(172)		687		(714)		558
Change in net unrealized loss on available-for-sale securities		(2,200)		—		(4,075)		—
Comprehensive loss attributable to the Company	$	(109,043)	$	(64,530)	$	(271,840)	$	(111,492)

Preferred stock dividends declared		—		—		—		(26)
Comprehensive loss attributable to common stockholders	$	(109,043)	$	(64,530)	$	(271,840)	$	(111,518)

Three months ended

Nine months ended

September 30,

September 30,


2017

2016

2017

2016

Net loss attributable to the Company

$
(40,983)

$
(13,394)

$
(107,641)

$
(38,276)

Other comprehensive income - foreign currency translation adjustment

555

23

1,711

317

Comprehensive loss

$
(40,428)

$
(13,371)

$
(105,930)

$
(37,959)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial ~~statements.~~statements

Table of Contents

Plug Power Inc. and Subsidiaries

Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)


						Accumulated
				Additional		Other							Total
	Common Stock			Paid-in		Comprehensive		Treasury Stock			Accumulated		Stockholders’
	Shares	Amount		Capital		Income		Shares	Amount		Deficit		Equity
December 31, 2020	473,977,469	$	4,740	$	3,446,650	$	2,451	15,926,068	$	(40,434)	$	(1,946,488)	$	1,466,919
Net loss attributable to the Company	—		—		—		—	—		—		(267,051)		(267,051)
Cumulative impact of Accounting Standards Update 2020-06 adoption	—		—		(130,185)		—	—		—		9,550		(120,635)
Other comprehensive loss	—		—		—		(4,789)	—		—		—		(4,789)
Stock-based compensation	61,408		—		34,813		—	—		—		—		34,813
Public offerings, common stock, net	32,200,000		322		2,022,871		—	—		—		—		2,023,193
Private offerings, common stock, net	54,966,188		549		1,564,088		—	—		—		—		1,564,637
Stock option exercises	4,576,102		46		5,270		—	—		—		—		5,316
Stock exchanged for tax withholding	—		—		—		—	1,106,580		(30,734)		—		(30,734)
Exercise of warrants	24,210,984		242		15,203		—	—		—		—		15,445
Provision for common stock warrants	—		—		4,430		—	—		—		—		4,430
Conversion of 3.75% Convertible Senior Notes	3,016,036		30		15,155		—	—		—		—		15,185
Conversion of 5.5% Convertible Senior Notes	69,808		1		159		—	—		—		—		160
September 30, 2021	593,077,995	$	5,930	$	6,978,454	$	(2,338)	17,032,648	$	(71,168)	$	(2,203,989)	$	4,706,889

December 31, 2019	318,637,560	$	3,186	$	1,506,953	$	1,288	15,259,045	$	(31,216)	$	(1,350,307)	$	129,904
Net loss attributable to the Company	—		—		—		—	—		—		(112,050)		(112,050)
Other comprehensive gain	—		—		—		558	—		—		—		558
Stock-based compensation	402,003		4		9,254		—	—		—		—		9,258
Stock dividend	5,156		—		20		—	—		—		(20)		—
Public offerings, net	35,276,250		353		344,045			—		—		—		344,398
Stock option exercises	13,736,265		137		32,416		—	—		—		—		32,553
Stock exchanged for tax withholding	—		—		—		—	667,023		(9,218)		—		(9,218)
Equity component of convertible senior notes, net of issuance costs and income tax benefit	—		—		108,479		—	—		—		—		108,479
Purchase of capped calls	—		—		(16,253)		—	—		—		—		(16,253)
Termination of capped calls	—		—		24,158		—	—		—		—		24,158
Provision for common stock warrants	—		—		32,529		—	—		—		—		32,529
Accretion of discount, preferred stock	—		—		(29)		—	—		—		—		(29)
Conversion of preferred stock	2,998,526		30		1,148		—	—		—		—		1,178
Conversion of 7.5% Convertible Senior Note	16,000,000		160		42,713		—	—		—		—		42,873
Repurchase of 5.5% Convertible Senior Notes, net of income tax benefit	9,409,591		94		(51,840)		—	—		—		—		(51,746)
Shares issued for acquisitions	9,658,465		97		49,576		—	—		—		—		49,673
September 30, 2020	406,123,816	$	4,061	$	2,083,169	$	1,846	15,926,068	$	(40,434)	$	(1,462,377)	$	586,265

Accumulated











Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Treasury Stock

Accumulated

Stockholders’


Shares

Amount

Capital

Income

Shares

Amount

Deficit

Equity

December 31, 2016

191,723,974

$
1,917

$
1,137,482

$
247

582,328

$
(3,091)

$
(1,051,467)

$
85,088

Net loss attributable to the Company

—

—

—

—

—

—

(107,641)

(107,641)

Other comprehensive income

—

—

—

1,711

—

—

—

1,711

Stock-based compensation

101,004

1

7,287

—

—

—

—

7,288

Stock dividend

48,510

1

76

—

—

—

(77)

—

Public offerings, common stock, net

9,314,666

93

20,571

—

—

—

—

20,664

Conversion of preferred stock, Series D

9,548,393

96

7,682

—

—

—

—

7,778

Conversion of preferred stock, Series C

2,772,518

28

416

—

—

—

—

444

Stock option exercises

110,000

1

39

—

—

—

—

40

Exercise of warrants, net of warrants issued

14,501,500

145

39,713

—

—

—

—

39,858

Provision for common stock warrants

—

—

34,532

—

—

—

—

34,532

Accretion of discount

—

—

(3,009)

—

—

—

—

(3,009)

September 30, 2017

228,120,565

$
2,282

$
1,244,789

$
1,958

582,328

$
(3,091)

$
(1,159,185)

$
86,753

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial ~~statements.~~statements

Table of Contents

Plug Power Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine months ended
	September 30,
	2021		2020
Operating Activities
Net loss attributable to the Company	$	(267,051)	$	(112,050)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of long-lived assets		15,903		9,860
Amortization of intangible assets		1,095		835
Stock-based compensation		34,813		9,258
Gain on extinguishment of debt		—		(13,222)
Amortization of debt issuance costs and discount on convertible senior notes		2,371		12,183
Provision for common stock warrants		4,746		25,198
Income tax benefit		—		(24,015)
Impairment of long-lived assets		1,329		—
Loss on service contracts		9,586		25,110
Fair value adjustment to contingent consideration		(8,760)		1,130
Net realized loss on investments		236		—
Lease origination costs		(7,889)		—
Change in fair value for equity securities		284		—
Loss on equity method investments		1,736		—
Changes in operating assets and liabilities that provide (use) cash:
Accounts receivable		(89,329)		(86,056)
Inventory		(90,428)		(57,615)
Prepaid expenses, and other assets		(28,465)		(4,956)
Accounts payable, accrued expenses, and other liabilities		28,992		41,125
Deferred revenue		42,330		16,709
Net cash used in operating activities		(348,501)		(156,506)

Investing Activities
Purchases of property, plant and equipment		(91,384)		(11,265)
Purchase of intangible assets		—		(1,638)
Purchases of equipment related to power purchase agreements and equipment related to fuel delivered to customers		(17,900)		(13,699)
Purchase of available-for-sale securities		(1,862,951)		—
Proceeds from sales and maturities of available-for-sale securities		1,105,874		—
Proceeds from sales of equity securities		21,780		—
Purchase of equity securities		(169,713)		—
Net cash paid for acquisition		—		(45,113)
Net cash used in investing activities		(1,014,294)		(71,715)

Financing Activities
Proceeds from exercise of warrants, net of transaction costs		15,445		—
Proceeds from public and private offerings, net of transaction costs		3,587,830		344,398
Payments of tax withholding on behalf of employees for net stock settlement of stock-based compensation		(30,734)		(9,218)
Proceeds from exercise of stock options		5,316		32,553
Proceeds from issuance of convertible senior notes, net		—		205,098
Repurchase of convertible senior notes		—		(90,238)
Purchase of capped calls and common stock forward		—		(16,253)
Proceeds from termination of capped calls		—		24,158
Principal payments on long-term debt		(29,129)		(27,845)
Proceeds from long-term debt, net		—		99,000
Repayments of finance obligations and finance leases		(20,413)		(19,038)
Proceeds from finance obligations		53,447		47,568
Net cash provided by financing activities		3,581,762		590,183
Effect of exchange rate changes on cash		(59)		(90)
Increase in cash, cash equivalents and restricted cash		2,218,908		361,872
Cash, cash equivalents, and restricted cash beginning of period		1,634,284		369,500
Cash, cash equivalents, and restricted cash end of period	$	3,853,192	$	731,372

Supplemental disclosure of cash flow information
Cash paid for interest, net capitalized interest of $2.6 million	$	10,341	$	16,975

Summary of non-cash activity
Recognition of right of use asset - finance leases	$	16,961	$	—
Recognition of right of use asset - operating leases		65,083		25,857
Conversion of preferred stock to common stock		—		43,058
Conversion of convertible senior notes to common stock		15,345		—
Accrued purchase of fixed assets, cash to be paid in subsequent period		8,832		—

Nine months ended

September 30,

2017

2016

Cash Flows From Operating Activities:

Net loss attributable to the Company

$
(107,641)

$
(38,276)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of property, plant and equipment, and leased property

6,596

2,912

Amortization of intangible assets

443

443

Stock-based compensation

7,288

6,745

Amortization of debt issuance costs

496

469

Provision for common stock warrants

34,570

—

Loss on disposal of leased property

—

41

Provision for loss contracts related to service

—

(1,071)

Change in fair value of common stock warrant liability

16,454

(4,709)

Changes in operating assets and liabilities that provide (use) cash:

Accounts receivable

(40,946)

10,644

Inventory

(14,747)

(3,042)

Prepaid expenses and other assets

(590)

(3,549)

Accounts payable, accrued expenses, and other liabilities

6,524

7,504

Accrual for loss contracts related to service

(752)

(5,745)

Deferred revenue

11,011

(2,035)

Net cash used in operating activities

(81,294)

(29,669)

Cash Flows From Investing Activities:

Purchases of property, plant and equipment

(1,820)

(2,464)

Purchases for construction of leased property

(26,471)

(42,674)

Net cash used in investing activities

(28,291)

(45,138)

Cash Flows From Financing Activities:

Change in restricted cash

6,052

1,908

Proceeds from exercise of warrants, net of transaction costs

17,636

111

Proceeds from exercise of stock options

40

19

Payments for redemption of preferred stock

(3,700)

—

Proceeds from public offerings, net of transaction costs

20,664

—

Proceeds from short-term borrowing, net of transaction costs

—

23,673

Principal payments on short-term borrowing

—

(25,000)

Proceeds from borrowing of long-term debt, net of transaction costs

20,147

23,407

Principal payments on long-term debt

(4,261)

—

Increase in finance obligations

14,664

29,242

Net cash provided by financing activities

71,242

53,360

Effect of exchange rate changes on cash

286

(28)

Decrease in cash and cash equivalents

(38,057)

(21,475)

Cash and cash equivalents, beginning of period

46,014

63,961

Cash and cash equivalents, end of period

$
7,957

$
42,486

Other Supplemental Cash Flow Information:

Cash paid for interest

$
2,357

$
1,563

Summary of noncash financing activity-conversions of preferred stock to common stock:

$
8,222

—

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial ~~statements.~~statements

Table of Contents

~~Notes to Interim Consolidated Financial Statements (Unaudited)~~

1. Nature of Operations

~~Description of Business~~

Plug Power ~~Inc., or~~is facilitating the ~~Company, is a leading provider of alternative energy technology focused on the design, development, commercialization~~paradigm shift to an increasingly electrified world by innovating cutting-edge hydrogen 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 for resale to customers.

Wesolutions. In our core business, we provide and continue to develop ~~commercially-viable~~commercially viable hydrogen and fuel cell product solutions to replace ~~lead‑acid~~lead-acid batteries in electric material handling vehicles and industrial trucks for some of the world’s largest ~~distribution~~retail-distribution and manufacturing businesses. We are focusing our efforts on industrial mobility applications, ~~(forklifts~~including electric forklifts and electric industrial ~~vehicles)~~vehicles, at ~~multi‑shift~~multi-shift high volume manufacturing and high throughput distribution sites where we believe our products and services provide a unique combination of productivity, flexibility, and environmental benefits. Additionally, we manufacture and sell fuel cell products to replace batteries and diesel generators in stationary backup power applications. These products ~~prove~~have proven valuable with telecommunications, transportation, and utility customers as robust, reliable, and sustainable power solutions.

Our current products and services include:

GenDrive: GenDrive is our hydrogen fueled ~~PEM~~Proton Exchange Membrane (“PEM”) fuel cell system providing power to material handling ~~vehicles;~~electric vehicles, including class 1, 2, 3 and 6 electric forklifts, Automated Guided Vehicles (“AGVs”) and ground support equipment;

GenFuel: GenFuel is our liquid hydrogen fueling delivery, generation, storage, and dispensing system;

GenCare: GenCare is our ongoing ‘internet of things’-based maintenance and on-site service program for GenDrive fuel ~~cells,~~cell systems, GenSure fuel cell systems, GenFuel hydrogen storage and dispensing products and ~~GenFuel products;~~ProGen fuel cell engines;

GenSure: GenSure ~~(formerly ReliOn)~~ is 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; GenSure High Power Fuel Cell Platform will support large scale stationary power and data center markets;

GenKey: GenKey is our ~~turn-key~~vertically integrated “turn-key” solution combining either GenDrive or GenSure fuel cell power with GenFuel fuel and GenCare aftermarket service, offering complete simplicity to customers transitioning to fuel cell power;

ProGen: ProGen is our fuel cell stack and engine technology ~~under development for use~~currently used globally in mobility and stationary fuel cell ~~systems;~~systems, and as engines in electric delivery vans. This includes the Plug Power membrane electrode assembly (“MEA”), a critical component of the fuel cell stack used in zero-emission fuel cell electric vehicle engines; and

~~GenFund: GenFund~~GenFuel Electrolyzers: GenFuel electrolyzers are modular, scalable hydrogen generators optimized for clean hydrogen production. Electrolyzers generate hydrogen from water using electricity and a special membrane and “green” hydrogen is ~~a collaboration with leasing organizations to provide cost efficient and seamless financing solutions to customers.~~generated by using renewable energy inputs, such as solar or wind power.

We provide our products worldwide through our direct product sales force, and by leveraging relationships with original equipment manufacturers ~~or OEMs,~~(“OEMs”) and their dealer networks. Plug Power is targeting Asia and Europe for expansion in adoption. Europe has rolled out ambitious targets for the hydrogen economy and Plug Power is executing on its strategy to become one of the European leaders. This includes a targeted account strategy for material handling as well as securing strategic partnerships with European OEMs, energy companies, utility leaders and accelerating our electrolyzer business. We manufacture our commercially viable products in Latham, New York, Rochester, New York and Spokane, Washington and support liquid hydrogen generation and logistics in Charleston, Tennessee.

~~We were organized as~~

Our wholly-owned subsidiary, Plug Power France, created a ~~corporation~~joint venture with Renault SAS (“Renault”) named HyVia, a French société par actions simplifiée (“HyVia”) in the ~~State of Delaware on June 27, 1997.~~

second quarter 2021. HyVia plans to manufacture and sell fuel cell powered electric light commercial vehicles (“FCELCVs”) and to supply hydrogen fuel and fueling stations to support the FCE-LCV market, in each case primarily in Europe. HyVia is owned 50% by Plug Power France and 50% by Renault.

Table of Contents

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

2. Summary of Significant Accounting Policies

~~Unless~~

Restatement

As previously disclosed in the ~~context indicates otherwise,~~Explanatory Note to 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 customers’ hydrogen infrastructure as well as delivery of the hydrogen fuel, continued development and expansion of our products, payment of lease obligations under sale/leaseback financings, and the repayment or refinancing of our long-term debt. 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 and expanding positive gross margins across all product lines; 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 and to repay or refinance our long-term debt, 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 $110.7 million~~Company’s Annual Report on Form 10-K for the ~~nine months~~fiscal year ended ~~September 30, 2017~~December 31, 2020 (the “2020 10-K”), the Company restated its previously issued audited consolidated financial statements as of and ~~$57.6 million, $55.8 million, and $88.6 million~~ for the years ended December 31, ~~2016, 2015,~~2019 and ~~2014, respectively,~~2018 and ~~has an accumulated deficit~~its unaudited interim condensed consolidated financial statements as of ~~$1.2 billion at~~and for each of the quarterly periods ended March 31, 2020 and 2019, June 30, 2020 and 2019, September 30, ~~2017.~~2020 and 2019 and December 31, 2019.

~~During~~Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q for the nine months ended September 30, 2017, cash used in operating activities was $81.3 million, consisting primarily of a net loss attributable to the Company of $107.6 million and net outflows from fluctuations in working capital and other assets and liabilities of $39.5 million, offsetperiods affected by the impact of noncash charges/gains of $65.8 million. The changes in working capital primarily were related to building of inventory and, an increase in accounts receivable offset by an increase of accounts payable, and increases in deferred revenue. As of September 30, 2017, we had cash and cash equivalents of $8.0 million and net working capital of $30.0 million. By comparison, at December 31, 2016, we had cash and cash equivalents of $46.0 million and net working capital of $44.4 million.

Net cash used in investing activities for the nine months ended September 30, 2017, totaled $28.3 million and included purchases of property, plant and equipment and outflows associated with materials, labor, and overhead necessary to construct new leased property. 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 nine months ended September 30, 2017 totaled $71.2 million and primarily resulted from net proceeds of $20.7 million pursuant to public offerings of common stock, net proceeds from borrowing of long-term debt of $20.6 million, net proceeds of $17.6 million pursuant to exercise of warrants, an increase in finance obligations of $14.7 million and a decrease in restricted cash, offset by redemption of Series D preferred stock and principal payments of long-term debt.

In connection with the consummation of the Walmart Transaction Agreement referenced in Note 5, Wal-Mart Stores, Inc. Transaction Agreement, the Company entered into a master lease agreement (the “Wells Fargo MLA”) with Wells Fargo to facilitaterestatement have not been amended. Accordingly, investors should not rely upon the Company’s ~~commercial transactions with Walmart. Pursuant~~previously released financial statements for these periods and any earnings releases or other communications relating to ~~the Wells Fargo MLA, the Company sells fuel cell systems~~these periods, and, ~~hydrogen infrastructure to Wells Fargo and then leases them back and operates them at Walmart sites. Also, in connection with the consummation of the Amended Loan Agreement referenced in Note~~

~~Table of Contents~~

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

8, Long-Term Debt, the Company entered into an amended and restated master lease agreement (the “Generate Capital MLA”) with Generate Capital to facilitate the aforementioned Company’s commercial transactions with Walmart. During July 2017, proceeds from transactions under this program, which are accounted for ~~as capital leases, were $17.7 million.~~

In previous years, the Company signed sale/leaseback agreements with various financial institutions to facilitate the Company’s commercial transactions with key customers. The Company had sold certain fuel cell systems and hydrogen infrastructure to the financial institutions, and leased the equipment back to support certain customer locations and to fulfill its varied PPAs. In connection with these operating leases, the financial institutions require the Company to maintain cash balances in restricted accounts securing the Company’s lease obligations. Cash received from customers under the PPAs is used to make lease payments. As the Company performs under these agreements, the required restricted cash balances are released, according to a set schedule. The total remaining lease payments to financial institutions under these agreements was $36.0 million, which has been fully secured with restricted cash and pledged service escrows.

We have historically funded our operations primarily through public and private offerings of common and preferred stock, as well as short-term borrowings, long-term debt, project financing and warrant exercises. The Company believes that its current working capital and cash anticipated to be generated from future operations, as well as borrowings from lending and project financing sources and proceeds from equity offerings, will provide sufficient liquidity to fund operations for at least one year after the date thatperiods, investors should rely solely on the financial statements are issued. There is no guarantee that future funding will be available if and when required or at terms acceptable to the Company. 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.~~financial data for the relevant periods included in the 2020 10-K. Commencing with our quarterly report on Form 10-Q for the quarterly period ended March 31, 2021, we are including in our quarterly reports for fiscal 2021 restated results for the corresponding interim periods of fiscal 2020.

~~2. Summary of Significant Accounting Policies~~

Principles of Consolidation

The ~~accompanying~~ unaudited interim condensed consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. ~~All significant intercompany~~Intercompany balances and transactions have been eliminated in consolidation. In addition, we include our share of the results of HyVia using the equity method based on our economic ownership interest and our ability to exercise significant influence over the operating and financial decisions of HyVia.

Interim Financial Statements

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ~~(SEC)~~(“SEC”). In the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly, in accordance with U.S. generally accepted accounting principles ~~(GAAP)~~(“GAAP”), the financial position, results of operations and cash flows for all periods presented, have been made. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited interim 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, 2016.~~2020 10-K.

The information presented in the accompanying unaudited interim condensed consolidated balance ~~sheet~~sheets as of December 31, ~~2016,~~2020 has been derived from the Company’s December 31, ~~2016~~2020 audited consolidated financial statements. ~~All other information has been derived from~~

Certain amounts in the ~~unaudited interim~~prior period condensed consolidated financial statements have been reclassified to conform to the presentation of the ~~Company.~~current period condensed consolidated financial statements.

There have been no changes in our accounting policies from those reported in our 2020 10-K, except for the adoption of Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), as described in the Recently Adopted Accounting Guidance section. We have also expanded our accounting policy relating to cash equivalents, available-for-sale securities, equity securities, and stock-based compensation as follows:

Cash Equivalents

109

Table of Contents

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~Revenue Recognition~~

The Company recognizes revenue under arrangements for products and services, which may include the sale of products and related services, including revenue from installation, service and maintenance, spare parts, hydrogen fueling services (which may include hydrogen supply as well as hydrogen fueling infrastructure) and leased units. The Company also recognizes revenue under research and development contracts, which are primarily cost reimbursement contracts associated with the development of PEM fuel cell technology.

The Company enters into revenue arrangements that may contain a combination of fuel cell systems and infrastructure, installation, service, maintenance, spare parts, and other support services. Revenue arrangements containing fuel cell systems and related infrastructure may be sold, or provided to customers under a PPA.

~~Sales of and Services Performed on Fuel Cell Systems and Related Infrastructure~~

When sold to customers, the Company accounts for each separate deliverable of these multiple deliverable arrangements as a separate unit of accounting if the delivered item or items have value to the customer on a standalone basis. The Company considers a deliverable to have standalone value if the item is sold separately by us or another entity or if the item could be resold by the customer. The Company allocates revenue to each separate deliverable based on its relative selling price. For a majority of our deliverables, the Company determines relative selling prices using its best estimate of the selling price since vendor-specific objective evidence and third-party evidence is generally not available for the deliverables involved in its revenue arrangements due to a lack of a competitive environment in selling fuel cell technology. When determining estimated selling prices, the Company considers the cost to produce the deliverable, a reasonable gross margin on that deliverable, the selling price and profit margin for similar products and services, the Company’s ongoing pricing strategy and policies, the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold, as applicable. The Company determines estimated selling prices for deliverables in its arrangements based on the specific facts and circumstances of each arrangement and analyzes the estimated selling prices used for its allocation of consideration of each arrangement.

Once relative selling prices are determined, the Company proportionately allocates the sale consideration to each element of the arrangement. The allocated sales consideration related to fuel cell systems and infrastructure, spare parts, and hydrogen infrastructure is recognized as revenue at shipment if title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. The allocated sales consideration related to service and maintenance is generally recognized as revenue on a straight-line basis over the term of the contract, as appropriate.

For those customers who do not purchase an extended maintenance contract, the Company does not include a right of return on its products other than rights related to standard warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated standard warranty costs at the same time that revenue is recognized for the related product. Only a limited number of fuel cell units are under standard warranty.

In a vast majority of its commercial transactions, the Company sells extended maintenance contracts that generally provide for a five to ten year warranty from the date of product installation. These types of contracts are accounted for as a separate deliverable, and accordingly, revenue generated from these transactions is deferred and recognized in income over the warranty period, generally on a straight-line basis. Additionally, the Company may enter into annual service and extended maintenance contracts that are billed monthly. Revenue generated from these transactions is recognized in income on a straight-line basis over the term of the contract. Costs are recognized as incurred over the term of the contract. When costs are projected to exceed revenues on the life of the contract, an accrual for loss contracts is recorded. Costs are estimated based upon historical experience, contractual agreements and the estimated impact of the Company’s cost reduction initiatives. The actual results may differ from these estimates.

~~Table of Contents~~

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~Power Purchase Agreements~~

When fuel cell systems and related infrastructure are provided to customers through a Power Purchase Agreement, or PPA, revenues associated with these agreements are treated as rental income and recognized on a straight-line basis over the life of the agreements. In conjunction with entering into a PPA with a customer, the Company may enter into sale/leaseback transactions with third-party financial institutions, whereby the fuel cells, related infrastructure, and service are sold to the third-party financial institution and leased back to the Company through either an operating or capital lease.

During 2017 and 2016, the Company’s sale/leaseback transactions with third-party financial institutions were required to be accounted for as capital leases under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 840-40, ~~Leases – Sale/Leaseback Transactions~~ ~~(ASC Subtopic 840-40). As a result, no upfront revenue was recognized at the closing of these transactions and a finance obligation for each lease was established.~~ The fuel cell systems and related infrastructure that are provided to customers through these PPAs are considered leased property on the accompanying unaudited interim consolidated balance sheet. Costs to service the leased property and the depreciation of the associated fuel cell systems and related infrastructure are considered cost of PPA revenue on the accompanying unaudited interim consolidated statement of operations.

All PPAs entered into through December 31, 2015 had a corresponding sale-leaseback transaction with a third-party financial institution, which was required to be accounted for as an operating lease. The Company accounts for these sale/leaseback transactions as operating leases in accordance with ASC Subtopic 840-40. The Company has rental expense associated with sale/leaseback agreements with financial institutions that were entered into commensurate with the PPAs. Rental expense is recognized on a straight-line basis over the life of the agreements and is characterized as cost of PPA revenue on the accompanying unaudited interim consolidated statement of operations.

~~Fuel Delivered to Customers~~

The Company purchases hydrogen fuel from suppliers and sells to its customers upon delivery. Revenue and cost of revenue related to this fuel is recorded as dispensed, and included in the respective “Fuel delivered to customers” lines on the unaudited interim consolidated statements of operations.

~~Research and Development Contracts~~

Contract accounting is used for research and development contract revenue. The Company generally shares in the cost of these programs with cost sharing percentages ranging from 30% to 50% of total project costs. Revenue from time and material contracts is recognized on the basis of hours expended plus other reimbursable contract costs incurred during the period and is included within the “other” revenue line on the unaudited interim consolidated statement of operations. All allowable work performed through the end of each calendar quarter is billed, subject to limitations in the respective contracts.

~~Cash Equivalents~~

Cash equivalents consist of money market accounts with an initial term of less than three months. At September 30, 2017 and December 31, 2016, cash equivalents consist of money market accounts. For purposes of the unaudited interim consolidated statements of cash flows, the Company considers all highly-liquid debt ~~instruments~~securities with original maturities of three months or less to be cash equivalents. ~~The Company’s~~At September 30, 2021, cash equivalents consisted of commercial paper and U.S. Treasury securities with original maturities of three months or less, and money market funds. Due to their short-term nature, the carrying amounts reported in the unaudited interim condensed consolidated balance sheets approximate the fair value of cash and cash ~~equivalents are deposited~~equivalents.

Available-for-sale securities

Available-for-sale securities is comprised of commercial paper with ~~financial institutions located~~original maturities greater than three months, U.S. Treasury securities, certificates of deposit and corporate bonds. We consider these securities to be available for use in our current year operations, and therefore classify them as current even if we do not dispose of the securities in the ~~U.S. and may~~following year.

Available-for-sale securities are recorded at ~~times exceed insured limits.~~

~~Common Stock Warrant Accounting~~

~~The Company accounts for common stock warrants~~fair value as ~~either derivative liabilities or as equity instruments depending on the specific terms~~ of ~~the warrant agreement.~~

~~Table~~each balance sheet date. As of ~~Contents~~

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~Derivative Liabilities~~

Registered common stock warrants that require the issuance of registered shares upon exercise and do not sufficiently preclude an implied right to cash settlement are accounted for as derivative liabilities. We currently classify these derivative warrant liabilities on the accompanying unaudited interim consolidated balance sheets as a long-term liability, which are revalued at each balance sheet date, ~~subsequent~~unrealized gains and losses, with the exception of credit related losses, are recorded to accumulated other comprehensive income (loss). Any credit related losses are recognized as a credit loss allowance on the balance sheet with a corresponding adjustment to operations. Realized gains and losses are due to the ~~initial issuance, using~~sale and maturity of securities classified as available-for-sale and represent the ~~Black-Scholes pricing model. This pricing model, which is~~net gain (loss) from accumulated other comprehensive income (loss) reclassifications for previously unrealized net gains on available-for-sale debt securities.

Equity securities

Equity securities are comprised of fixed income and equity market index mutual funds. Equity securities are valued at fair value with changes in the fair value recognized in our unaudited interim condensed consolidated statement of operations. We consider these securities to be available for use in our current year operations, and therefore classify them as current even if we do not dispose of the securities in the following year.

Stock-based compensation

Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. The Company measures stock-based compensation cost at grant date, based ~~in part, upon unobservable inputs for which there is little or no market data, requires the Company to develop its own assumptions. Changes in~~on the fair value of the ~~warrants are reflected~~award estimated under the current provisions of Accounting Standards Codification (“ASC”) Topic 718, Compensation - Stock Compensation. For service stock options and restricted stock awards, the Company estimates the fair value of stock-based awards using a Black-Scholes valuation model and recognizes the cost as expense on a straight-line basis over the option’s requisite service period.

In September 2021, the Company also issued performance stock option awards that include a market condition. The grant date fair value of performance stock options is estimated using a Monte Carlo simulation model and the cost is recognized using the accelerated attribution method.

Stock-based compensation expense is recorded in cost of revenue associated with sales of fuel cell systems and related infrastructure, cost of revenue for services performed on fuel cell systems and related infrastructure, research and development expense and selling, general and administrative expenses in the ~~accompanying unaudited interim~~ consolidated statements of operations ~~as change~~based on the employees’ respective function.

Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

Other than the adoption of the accounting guidance mentioned in our 2020 10-K and ASU 2020-06, there have been no other significant changes in ~~fair value~~our reported financial position or results of ~~common stock warrant liability.~~operations and cash flows resulting from the adoption of new accounting pronouncements.

~~Equity Instruments~~

~~Common stock warrants that meet certain applicable requirements of ASC Subtopic 815-40,~~ On January 1, 2021, we early adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and ~~Hedging –~~ Hedging—Contracts in Entity’s Own Equity~~, and other related guidance, including~~ (Subtopic 815-40) using the ~~ability of~~modified retrospective approach. Consequently, the ~~Company to settle the warrants without the issuance of registered shares or the absence of rights of the grantee to require cash settlement, are~~Company’s 3.75% Convertible Senior Notes due 2025 (the “3.75% Convertible Senior Notes”) is now accounted for as a single liability measured at its amortized cost. This accounting change removed

Table of Contents

quotes from less active markets or quoted prices of securities with similar characteristics. There were 0 transfers betweenLevel1, Level2, or Level 3 during the nine months ended September 30, ~~2016, the Company released its liability for unrecognized tax benefits of $392 thousand, as the related statute of limitations has expired.~~2021.

~~13. Fair Value Measurements~~

~~Derivative Liabilities~~

~~The Company’s common stock warrant liability represents the only asset or liability classified financial~~

~~Table of Contents~~

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~instrument~~Assets and liabilities measured at fair value on a recurring basis ~~in the unaudited interim consolidated balance sheets. The fair value measurement is determined by using Level 3 inputs due to the lack~~are summarized below (in thousands):


		As of September 30, 2021
		Carrying		Fair		Fair Value Measurements
		Amount		Value		Level 1		Level 2		Level 3
Assets
Cash equivalents (1)	$	610,651	$	610,651	$	140,574	$	470,077	$	—
Corporate bonds		530,089		530,089		—		530,089		—
Commercial paper		35,795		35,795		—		35,795		—
U.S. Treasuries		169,878		169,878		169,878		—		—
Certificates of deposit		17,004		17,004		—		17,004		—
Equity securities		147,649		147,649		147,649		—		—

Liabilities
Contingent consideration		18,520		18,520		—		—		18,520
Convertible senior notes		192,320		1,006,639		—		1,006,639		—
Long-term debt		147,255		147,255		—		—		147,255
Finance obligations		207,837		207,837		—		—		207,837


		As of December 31, 2020
		Carrying		Fair		Fair Value Measurements
		Amount		Value		Level 1		Level 2		Level 3
Liabilities
Contingent consideration		9,760		9,760		—		—		9,760
Convertible senior notes		85,640		1,272,766		—		1,272,766		—
Long-term debt		175,402		175,402		—		—		175,402
Finance obligations		181,553		181,553		—		—		181,553

(1)

Included in “Cash and cash equivalents” in our unaudited interim condensed consolidated balance sheets as of active and observable markets that can be used to price identical assets. Level 3 inputs are unobservable inputs and should be used to determine fair value only when observable inputs are not available. Unobservable inputs should be developed based on the best information available in the circumstances, which might include internally generated data and assumptions being used to price the asset or liability.

Fair value of the common stock warrant liability is based on the Black-Scholes pricing model which is based, in part, upon unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions.

~~The Company used the following assumptions for its liability-classified common stock warrants:~~


	~~Nine months ended~~
	September 30, ~~2017~~	~~September 30, 2016~~
~~Risk-free interest rate~~	~~1.01% - 2.01%~~	~~0.68% - 0.77%~~
~~Volatility~~	~~62.00% - 108.77%~~	~~59.60% - 60.60%~~
~~Expected average term~~	~~0.39 - 5.23~~	~~1.39 - 2.29~~ 2021.

~~There was no expected dividend yield for the warrants granted.~~

If factors change and different assumptions are used, the warrant liability and the change in estimated fair value could be materially different. Generally, as the market price of our common stock increases, the fair value of the warrants increase, and conversely, as the market price of our common stock decreases, the fair value of the warrants decrease. Also, a significant increase in the volatility of the market price of the Company’s common stock, in isolation, would result in significantly higher fair value measurements; and a significant decrease in volatility would result in significantly lower fair value measurements.

~~The following table shows the activity in the common stock warrant liability (in thousands):~~

Nine months ended

Common stock warrant liability

September 30, 2017

September 30, 2016

Beginning of period

$
11,387

$
5,735

Change in fair value of common stock warrants

16,454

(4,709)

Issuance of common stock warrants

4,905

—

Exercise of common stock warrants

(27,089)

(141)

End of period

$
5,657

$
885

~~Equity Instruments~~

The fair ~~value measurement of the Company’s equity-classified common stock warrants is~~values for available-for-sale and equity securities are based on prices obtained from independent pricing services. Available-for-sale securities are characterized as Level 2 assets, as their fair values are determined by using observable market inputs. Equity securities are characterized as Level ~~3 inputs due to the lack of~~1 assets, as their fair values are determined using active ~~and observable~~ markets ~~that can be used to price~~for identical assets. ~~Level 3 inputs are unobservable inputs and should be used to determine~~

Financial instruments not recorded at fair value ~~only when observable inputs are~~on a recurring basis include equity method investments that have not ~~available. Unobservable inputs should be developed based on the best information available~~been remeasured or impaired in the ~~circumstances, which might include internally generated data~~current period, such as our investment in HyVia.

16. Operating and ~~assumptions being used to price the warrants.~~Finance Lease Liabilities

Fair value of the equity-classified common stock warrants is based on the Monte Carlo pricing model which is based, in part, upon unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions.

The Monte Carlo pricing models used in the determination of the fair value of the equity-classified warrants also incorporate assumptions involving future revenues associated with Amazon and Walmart, and related timing. The

~~Table of Contents~~

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~Company used the following assumptions for its equity-classified common stock warrants:~~


	~~Nine months ended~~
	~~September 30, 2017~~	~~September 30, 2016~~
~~Risk-free interest rate~~	~~2.30% - 2.36%~~	—
~~Volatility~~	~~85.00% - 90.00%~~	—
~~Expected average term~~	~~9.51 - 10.00~~	—

~~There was no expected dividend yield for the warrants granted.~~

~~The following table represents the fair value per warrant on the execution date of the transaction agreements and as of September 30, 2017:~~

Amazon Warrant Shares

Walmart Warrant Shares
Issuance date - first tranche
$
1.15
$
1.88
As of period end - second tranche

2.29

2.25

~~14. Commitments and Contingencies~~

~~Operating Leases~~

As of September 30, ~~2017 and December 31, 2016,~~2021, the Company ~~has several non-cancelable~~had operating leases, ~~(as lessor and~~ as ~~lessee),~~lessee, primarily associated with sale/leaseback transactions that are partially secured by restricted cash, security deposits and pledged escrows (see also Note 1)1, “Nature of Operations”) as summarized below. These leases expire over the next ~~six~~one to nine years. Minimum rent payments under operating leases are recognized on a ~~straight‑line~~straight-line basis over the term of the lease.

Leases ~~where the Company is the lessor~~ contain termination clauses with associated penalties, the amount of which cause the likelihood of ~~cancelation~~cancellation to be remote. At the end of the lease term, the leased assets may be returned to the lessor by the Company, the Company may negotiate with the lessor to purchase the assets at fair market value, or the Company may negotiate with the lessor to renew the lease at market rental rates. No residual value guarantees are contained in the leases. No financial covenants are contained within the lease; however there are customary operational covenants such as assurance the Company properly maintains the leased assets and carries appropriate insurance, etc. The leases include credit support in the form of either cash, collateral or letters of credit. See Note 19, “Commitments and Contingencies” for a description of cash held as security associated with the leases.

The Company has finance leases associated with its property and equipment in Latham, New York and at fueling customer locations. The fair value of this finance obligation approximated the carrying value as of September 30, 2021.

Table of Contents

Future minimum lease payments under ~~non-cancelable~~ operating and finance leases (with initial or remaining lease terms in excess of one year) as of September 30, ~~2017 are~~2021 were as follows (in thousands):


			Finance		Total
		Operating Lease	Lease		Lease
		Liability	Liability		Liabilities
Remainder of 2021	$	9,929	$	1,019	$	10,948
2022		39,932		4,012		43,944
2023		39,989		3,989		43,978
2024		39,957		3,996		43,953
2025 and thereafter		90,241		10,843		101,084
Total future minimum payments		220,048		23,859		243,907
Less imputed interest		(57,364)		(4,074)		(61,438)
Total	$	162,684	$	19,785	$	182,469

As Lessor

As Lessee
Remainder of 2017

$
5,585

$
3,271
2018

22,339

12,920
2019

22,143

11,789
2020

20,987

10,633
2021

16,751

6,346
2022 and thereafter

8,639

1,962
Total future minimum lease payments

$
96,444

$
46,921

Rental expense for all operating leases was ~~$3.4~~$9.6 million and ~~$3.7~~$8.1 million for the three months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. Rental expense for all operating leases was ~~$9.9~~$25.8 million and ~~$10.1~~$20.6 million for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively.

The gross profit on sale/leaseback transactions for all operating leases was $30.7 million and $25.2 million for the three months ended September 30, 2021 and 2020, respectively. The gross profit on sale/leaseback transactions for all operating leases was $66.1 million and $44.9 million for the nine months ended September 30, 2021 and 2020, respectively.

Right of use assets for sale/leaseback transactions obtained in exchange for new operating lease liabilities was $26.6 million and $24.6 million for the three months ended September 30, 2021 and 2020, respectively. Right of use assets for sale/leaseback transactions obtained in exchange for new operating lease liabilities was $62.5 million and $32.7 million for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, ~~2017~~2021 and December 31, ~~2016, prepaid rent~~2020, the right of use assets associated with operating leases was $200.2 million and $136.9 million, respectively. The accumulated depreciation for these right of use assets was $32.3 million and $19.9 million at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, the right of use assets associated with finance leases was $22.8 million and $5.7 million, respectively. The accumulated depreciation for these right of use assets was $757 thousand and $102 thousand at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, security deposits associated with sale/leaseback transactions were ~~$11.4~~$3.3 million and ~~$11.8~~$5.8 million, ~~respectively. At September 30, 2017, $1.8 million of the amount is included in prepaid expenses~~respectively, and ~~other current assets and $9.6 million was~~were included in other assets ~~on the unaudited interim consolidated balance sheet. At December 31, 2016, $1.9 million of this amount was included~~ in ~~prepaid expenses and other current assets and $9.9 million was included in other assets on~~ the consolidated balance ~~sheet.~~sheets.

Other information related to the operating leases are presented in the following table:


	Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020
Cash payments (in thousands)	$	25,726	$	14,954
Weighted average remaining lease term (years)		5.72		4.55
Weighted average discount rate		11.2%		11.8%

~~Table~~Right of ~~Contents~~

~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~Finance Obligations~~

~~During~~use assets obtained in exchange for new finance lease liabilities were $5.8 million and $0 for the three months ended September 30, 2021 and 2020, respectively. Right of use assets obtained in exchange for new finance lease liabilities were $17.9 million and $686 thousand for the nine months ended September 30, ~~2017, the Company entered into a sale/leaseback transaction, which was accounted for as a capital lease~~2021 and ~~reported as part~~2020, respectively.

Table of ~~finance obligations on the Company’s unaudited interim consolidated balance sheet. The outstanding balance of finance obligations~~Contents

Other information related to ~~sale/leaseback transactions at September 30, 2017 was $45.9 million. The fair value of~~ the finance ~~obligation approximates~~leases are presented in the ~~carrying value as of September 30, 2017.~~following table:


	Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020
Cash payments (in thousands)	$	2,128	$	252
Weighted average remaining lease term (years)		4.57		6.51
Weighted average discount rate		6.9%		9.6%

Future minimum lease payments under non-cancelable capital leases related to sale/leaseback transactions (with initial or remaining lease terms in excess of one year) as of September 30, 2017 are (in thousands):

17. Finance Obligation

Total

Imputed

Net Present


Payments

Interest

Value
Remainder of  2017

$
12,389

$
1,501

$
10,888
2018

14,632

2,916

11,716
2019

5,540

2,078

3,462
2020

5,540

1,668

3,872
2021

5,540

1,199

4,341
2022 and thereafter

13,058

1,418

11,640
Total future minimum lease payments

$
56,699

$
10,780

$
45,919

~~In prior years, the~~The Company ~~received cash for~~has sold future services to be performed associated with certain sale/leaseback transactions and recorded the balance as a finance obligation. The outstanding balance of this obligation at September 30, ~~2017~~2021 was $190.5million, $30.5 million and $160.0 million of which was classified as short-term and long-term, respectively, on the accompanying consolidated balance sheet. The outstanding balance of this obligation at December 31, ~~2016 is $11.1~~2020 was $157.7 million, $24.2 million and ~~$12.8~~$133.5 million of which was classified as short-term and long-term, respectively. The amount is amortized using the effective interest method. The fair value of this finance obligation ~~approximates~~approximated the carrying value as of September 30, ~~2017.~~

The Company has a capital lease associated with its property in Latham, New York. Liabilities relating to this agreement of $2.3 million and $2.4 million have been recorded as a finance obligation, in the accompanying unaudited interim consolidated balance sheets as of September 30, 20172021 and December 31, ~~2016, respectively.~~2020.

In prior periods, the Company entered into sale/leaseback transactions that were accounted for as financing transactions and reported as part of finance obligations. The outstanding balance of finance obligations related to sale/leaseback transactions at September 30, 2021 was $17.3 million, $5.1 million and $12.2 million of which was classified as short-term and long-term, respectively on the accompanying consolidated balance sheet. The outstanding balance of this obligation at December 31, 2020 was $23.9 million, $8.0 million and $15.9 million of which was classified as short-term and long-term, respectively on the accompanying consolidated balance sheets. The fair value of this finance obligation ~~approximates~~approximated the carrying value as of both September 30, ~~2017.~~2021 and December 31, 2020.

~~Restricted Cash~~Future minimum payments under finance obligations notes above as of September 30, 2021 were as follows (in thousands):


					Total
		Sale of Future		Sale/leaseback	Finance
		revenue - debt		financings	Obligations
Remainder of 2021	$	12,788	$	1,680	$	14,468
2022		50,632		4,975		55,607
2023		50,632		3,148		53,780
2024		50,632		16,154		66,786
2025 and thereafter		86,614		—		86,614
Total future minimum payments		251,298		25,957		277,255
Less imputed interest		(60,760)		(8,658)		(69,418)
Total	$	190,538	$	17,299	$	207,837

Other information related to the above finance obligations are presented in the following table:


		Nine months ended		Nine months ended
		September 30, 2021		September 30, 2020
Cash payments (in thousands)	$	41,325	$	31,693
Weighted average remaining term (years)		4.88		4.74
Weighted average discount rate		11.3%		11.3%

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18. Investments

The ~~Company has entered into~~amortized cost, gross unrealized gains and losses, fair value of those investments classified as available-for-sale, and allowance for credit losses at September 30, 2021 are summarized as follows (in thousands):


	Amortized		Gross		Gross		Fair		Allowance for
	Cost		Unrealized Gains		Unrealized Losses		Value		Credit Losses
Corporate bonds	$	533,691	$	93	$	(3,695)	$	530,089		—
Commercial paper		35,719		76		—		35,795		—
Certificates of deposit		17,017		—		(13)		17,004		—
U.S. Treasuries		170,414		1		(537)		169,878		—
Total	$	756,841	$	170	$	(4,245)	$	752,766	$	—

The cost, gross unrealized gains and losses, and fair value of those investments classified as equity securities at September 30, 2021 are summarized as follows (in thousands):


	September 30, 2021
			Gross		Gross		Fair
		Cost	Unrealized Gains		Unrealized Losses		Value
Fixed income mutual funds	$	77,766	$	—	$	(132)	$	77,634
Exchange traded mutual funds		70,167		—		(152)		70,015
Total	$	147,933	$	—	$	(284)	$	147,649

A summary of the amortized cost and fair value of investments classified as available-for-sale, by contractual maturity, as of September 30, 2021 is as follows (in thousands):


	September 30, 2021
		Amortized	Fair
Maturity:		Cost	Value
Within one year	$	447,479	$	446,011
After one through five years		309,362		306,755
Total	$	756,841	$	752,766

Accrued interest income was $4.9 million at September 30, 2021 and is included within the balance for prepaid expenses and other current assets in the unaudited interim condensed consolidated balance sheets.

19. Commitments and Contingencies

Restricted Cash

In connection with certain of the above noted sale/leaseback agreements, ~~associated with its products and services. In connection with these agreements,~~ cash of ~~$47.6~~$301.3 million iswas required to be restricted as security ~~and~~as of September 30, 2021, which restricted cash will be released over the lease term. ~~The~~As of September 30, 2021, the Company ~~has additional~~also had certain letters of credit backed by restricted cash totaling $137.7 million that are security ~~deposits as disclosed in~~for the ~~Operating Leases section above.~~

The Company also has letters of credit in the aggregate amount of $1.0 million associated with an agreement to provide hydrogen infrastructure and hydrogen to a customer at its distribution center and with a finance obligation from theabove noted sale/leaseback ~~of its building. Cash collateralizing these letters of credit is also considered restricted cash.~~agreements.

Litigation

Legal matters are defended and handled in the ordinary course of business. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company has ~~established~~not recorded any accruals ~~for matters for~~related to any legal matters.

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Concentrations of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents, restricted cash, accounts receivable and marketable securities. Cash and restricted cash are maintained in accounts with financial institutions, which, ~~management considers a loss to be probable and reasonably estimable. It is~~at times may exceed the ~~opinion of management that facts known at the present time do not indicate that such litigation, after taking into account~~Federal depository insurance coverage of $0.25 million. The Company has not experienced losses on these accounts and management believes, based upon the ~~aforementioned accruals, will have a material adverse impact on our results~~quality of ~~operations,~~the financial ~~position, or cash flows.~~

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~~Notes to Interim Consolidated Financial Statements (Unaudited) (continued)~~

~~Concentrations of~~institutions, that the credit risk with regard to these deposits is not significant. The Company’s available-for-sale securities consists primarily of investments in commercial paper, U.S. Treasury securities, and short-term high credit quality corporate debt securities. Equity securities are comprised of fixed income and equity market index mutual funds.

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

At September 30, ~~2017, one~~2021, 1 customer ~~comprises approximately 87.1%~~comprised 79.6% of the total accounts receivable balance. At December 31, ~~2016, two~~2020, 3 customers ~~comprise approximately 59.9%~~comprised 73.9% of the total accounts receivable balance.

For purposes of assigning a customer to a sale/leaseback transaction completed with a financial institution, the Company considers the end user of the assets to be the ultimate customer. For the three and nine months ended September 30, ~~2017, 84.0%~~2021, 80.1% and 80.6%, of total consolidated revenues were associated with two and three customers, respectively. For the three and nine months ended September 30, 2020, 83.0% and 71.8% of total consolidated revenues were associated primarily with three and two ~~customers. For~~customers, respectively.

20. Employee Benefit Plans

2011 and 2021 Stock Option and Incentive Plan

On May 12, 2011, the Company’s stockholders approved the 2011 Stock Option and Incentive Plan (the “2011 Plan”). The 2011 Plan provided for the issuance of up to a maximum number of shares of common stock equal to the sum of (i) 1,000,000, plus (ii) the number of shares of common stock underlying any grants pursuant to the 2011 Plan or the Plug Power Inc. 1999 Stock Option and Incentive Plan that are forfeited, canceled, repurchased or are terminated (other than by exercise). The shares were issued pursuant to stock options, stock appreciation rights, restricted stock awards and certain other equity-based awards granted to employees, directors and consultants of the Company. NaN further grants may be made under the 2011 Plan after May 12, 2021. Through various amendments to the 2011 Plan approved by the Company’s stockholders, the number of shares of the Company’s common stock authorized for issuance under the 2011 Plan had been increased to 42.4 million. The Company recorded expenses of approximately $12.7 million and $2.3 million, for the three months ended September 30, 2021 and 2020, respectively, in connection with the 2011 Plan. The Company recorded expense of approximately $32.3 million and $7.3 million, for the nine months ended September 30, ~~2016, 41.7%~~2021 and 2020, respectively, in connection with the 2011 Plan. In July 2021, the 2021 Stock Option Incentive Plan (the “2021 Plan”) was approved by the Company’s stockholders. The 2021 Plan provides for the issuance of ~~total consolidated revenues~~up to a maximum number of shares of common stock equal to the sum of (i) 22,500,000 shares, plus 473,491 shares remaining under the 2011 Plan that were ~~associated primarily with one customer.~~ rolled into the 2021 Plan, plus (iii) shares underlying any awards under the 2011 Plan that are forfeited, canceled, cash-settled or otherwise terminated, other than by exercise.

Option Awards

The Company issues options that are time and performance-based awards. All option awards are determined to be classified as equity awards.

Service Stock Options Awards

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To date, options granted under the 2011 and 2021 Plans have vesting provisions ranging from one to three years in duration and expire ten years after issuance. Options for employees issued under this plan generally vest in equal annual installments over three years and expire ten years after issuance Options granted to members of the Board generally vest one year after issuance. The Company estimates the fair value of the service stock options using a Black-Scholes valuation model, and the resulting fair value is recorded as compensation cost on a straight-line basis over the option vesting period. Key inputs and assumptions used to estimate the fair value of the service stock options include the grant price of the award, the expected option term, volatility of the Company’s stock, an appropriate risk-free rate, and the Company’s dividend yield. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company. The assumptions made for purposes of estimating fair value under the Black-Scholes model for the 1,870,835 and 3,429,549 service stock options granted during the nine months ended September 30, 2021 and 2020, respectively, were as follows:


	September 30,	September 30,
	2021	2020
Expected term of options (years)	3-5	6
Risk free interest rate	0.61% - 1.05%	0.37% - 1.37%
Volatility	72.46% - 75.52%	64.19% - 66.94%

There was 0 expected dividend yield for the service stock options granted.

The Company has historically used the simplified method in determining its expected term of all its service stock option grants in all periods presented. The simplified method was used because the Company did not believe historical exercise data provided a reasonable basis for the expected term of its grants, primarily as a result of the limited number of service stock option exercises that have historically occurred. Due to the recent increase in exercise activity at the Company, beginning in the second quarter of 2021, the expected term is based on the Company’s historical experience with employee early exercise behavior. The estimated stock price volatility was derived from the Company’s actual historic stock prices over the past five years, which represents the Company’s best estimate of expected volatility.

The following table reflects the service stock option activity for the nine months ended September 30, 2021:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Terms	Value
Options outstanding at December 31, 2020	10,284,498	$	5.78	7.8	$	289,316
Granted	1,870,835		32.48	—		—
Exercised	(1,911,112)		2.78	—		—
Forfeited	(15,833)		21.35	—		—
Expired	(4,100)		6.10	—		—
Options outstanding at September 30, 2021	10,224,288	$	11.21	7.9	$	146,581
Options exercisable at September 30, 2021	5,045,168		4.46	6.7		106,360
Options unvested at September 30, 2021	5,179,120	$	17.77	9.0	$	40,221

The weighted average grant-date fair value of the service stock options granted during the three months ended September 30, 2021 and 2020 was $15.82 and $7.45, respectively. The weighted average grant-date fair value of the service stock options granted during the nine months ended September 30, 2021 and 2020 was $19.76 and $7.21, respectively. The total fair value of the service stock options that vested during the three months ended September 30, 2021 and 2020 was approximately $10.4 million and $5.2 million, respectively. The total fair value of the service stock options that vested during the nine months ended September 30, 2021 and 2020 was approximately $10.9 million and $5.9 million, respectively.

Compensation cost associated with service stock options represented approximately $4.2 million and $1.1 million of the total share-based payment expense recorded for the three months ended September 30, 2021 and September 30,

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2020, respectively. Compensation cost associated with service stock options represented approximately $11.9 million and 4.1 million of the total share-based payment expense recorded for the nine months ended September 30, 2021 and September 30, 2020, respectively. As of September 30, 2021 and 2020 there was approximately $50.2 million and $8.2 million of unrecognized compensation cost related to service stock option awards to be recognized over the next three years.

Performance Stock Option Awards

In September 2021, the Compensation Committee approved the grant of performance stock options to the Company’s Chief Executive Officer and certain other executive officers. These performance stock options are subject to both performance-based conditions tied to the achievement of stock price hurdles and time-based vesting; therefore, a Monte Carlo Simulation was utilized to determine the grant date fair value with the associated expense recognized over the requisite service period. Up to one-third (1/3) the performance stock options will vest and become exercisable on each of the first three anniversaries of the grant date, provided that the volume weighted average price of the Company’s common stock during any 30 consecutive trading day period in the three year performance period following the grant date of the stock options (“VWAP”) equals or exceeds certain levels. For the Company’s Chief Executive Officer, 25% of his performance stock options will be deemed to have satisfied the performance-based conditions and will be eligible to be exercised over time if the VWAP equals or exceeds $35; an additional 25% of his options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $50; an additional 16.675% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $65; an additional 16.65% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $80; and the remaining 16.675% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $100. There will be no interpolation for the Chief Executive Officer’s performance stock option if the VWAP falls between any two stock price hurdles, unless in the event of a change in control. For executive officers other than the Chief Executive Officer, 25% of the performance stock options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals $35; an additional 25% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals $50; and the remaining 50% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $100. If the VWAP falls between two of the stock price hurdles, an incremental number of options will become exercisable based on linear interpolation in $1 increments. Failure to achieve any of the stock price hurdles applicable to a performance stock option during the three-year performance period will result in the applicable options not becoming exercisable. The performance-based stock options have a maximum term of seven years from the grant date.

Key inputs and assumptions used to estimate the fair value of performance stock options include the grant price of the awards, the expected option term, VWAP hurdle rates, volatility of the Company’s stock, an appropriate risk-free rate, and the Company’s dividend yield. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company.

The following table presents key assumptions used to estimate the fair value of the performance stock option awards granted in 2021:


		September 30,
		2021
Remaining VWAP performance period (years)		3
Risk- free interest rate		1.12%
Expected volatility		70.00%
Closing stock price on grant date		$ 26.92

The following table reflects the performance stock option award activity for the nine months ended September 30, 2021. Solely for the purposes of this table, the number of performance options is based on participants earning the maximum number of performance options (i.e 200% of the target number of performance options).

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				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Terms	Value
Granted	14,560,000		26.92	—		—
Options outstanding at September 30, 2021	14,560,000	$	26.92	6.98	$	—
Options unvested at September 30, 2021	14,560,000	$	26.92	6.98	$	—

The weighted average grant-date fair value of performance stock options granted during the three months and nine months ended September 30, 2021 was $12.78. There were 0 performance stock options that were exercised during the three months and nine months ended September 30, 2021.

Compensation cost associated with performance stock options represented approximately $2.0 million of the total share-based payment expense recorded for the three months and nine months ended September 30, 2021. As of September, 30, 2021, there was approximately $183.7 million of unrecognized compensation cost related to performance stock option awards to be recognized over the next three years.

Restricted Stock Awards

Restricted stock awards generally vest in equal installments over a period of one to three years. Restricted stock awards are valued based on the closing price of the Company’s common stock on the date of grant, and compensation cost is recorded on a straight-line basis over the share vesting period. The Company recorded expense associated with its restricted stock awards of approximately $6.5 million and $1.2 million, for the three months ended September 30, 2021 and 2020, respectively. The Company recorded expense associated with its restricted stock awards of approximately $18.5 million and $3.2 million, for the nine months ended September 30, 2021 and 2020, respectively. Additionally, for the nine months ended September 30, 2021 and 2020, there was $81.2 million and $6.2 million, respectively, of unrecognized compensation cost related to restricted stock awards to be recognized over the next three years.

A summary of restricted stock activity for the year ended September 30, 2021 is as follows (in thousands except share amounts):


		Aggregate
		Intrinsic
	Shares	Value
Unvested restricted stock at December 31, 2020	5,874,642	$	—
Granted	1,812,856		—
Vested	(2,713,789)		—
Forfeited	(13,333)		—
Unvested restricted stock at September 30, 2021	4,960,376	$	126,688

401(k) Savings & Retirement Plan

The Company offers a 401(k) Savings & Retirement Plan to eligible employees meeting certain age and service requirements. This plan permits participants to contribute 100% of their salary, up to the maximum allowable by the Internal Revenue Service regulations. Participants are immediately vested in their voluntary contributions plus actual earnings or less actual losses thereon. Participants are vested in the Company’s matching contribution based on years of service completed. Participants are fully vested upon completion of three years of service. During 2018, the Company began funding its matching contribution in a combination of cash and common stock. The Company issued 54,531 shares of common stock and 368,903 shares of common stock pursuant to the Plug Power Inc. 401(k) Savings & Retirement Plan during the nine months ended September 30, 2021 and 2020, respectively.

The Company’s expense for this plan was approximately $1.1 million, and $0.6 million for the three months ended September 30, 2021 and 2020, respectively. The Company’s expense for this plan was approximately $3.4 million, and $1.9 million for the nine months ended September 30, 2021 and 2020, respectively.

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Non-Employee Director Compensation

Each non-employee director is paid an annual retainer for his or her service, in the form of either cash or stock compensation. The Company granted 3,685 shares of common stock and 4,146 shares of common stock to non-employee directors as compensation for the three months ended September 30, 2021 and 2020, respectively. The Company granted 8,923 shares of common stock and 26,636 shares of common stock to non-employee directors as compensation for the nine months ended September 30, 2021 and 2020, respectively. All common stock issued is fully vested at the time of issuance and is valued at fair value on the date of issuance. The Company’s share-based compensation expense in connection with non-employee director compensation was approximately $99 thousand and $56 thousand for the three months ended September 30, 2021 and 2020, respectively. The Company’s share-based compensation expense in connection with non-employee director compensation was approximately $277 thousand and $167 thousand for the nine months ended September 30, 2021 and 2020, respectively.

21. Subsequent Events

In November 2021, the Company entered into a signing protocol to acquire Frames Group (“Frames”), a leader in engineering, process and systems integration serving the energy sector. The purchase price is approximately €115 million, of which €30 million is based on future earnouts over the next four years from the completion date. Plug Power will leverage Frames’ capabilities as well as its existing network of suppliers and contract manufacturing facilities to deliver electrolyzer solutions of all sizes, from one megawatt (MW) containerized solutions to solutions for 100 MW-1,000 MW standalone plants or integrated into customers’ processes. The acquisition is expected to be completed by the end of the year, and is subject to customary closing conditions, including receipt of Dutch works council advice.

On October 14, 2021, the Company and its wholly-owned subsidiary Plug Power Hydrogen Holdings, Inc. entered into a definitive agreement for the acquisition of Applied Cryo Technologies, Inc. for a purchase price of approximately $170 million, of which $40 million will be in stock and $30 million will be based on future earnouts over the next two and half years. Applied Cryo Technologies, Inc. is a leading provider of technology, equipment and services for the transportation, storage and distribution of liquified hydrogen, oxygen, argon, nitrogen and other cryogenic gases. The acquisition is expected to close during the fourth quarter of 2021 and is subject to customary closing conditions, including receipt of all approvals or the termination or expiration of all waiting periods required under applicable antitrust laws.

In October 2021, the Company and SK E&S Co., Ltd., an energy company affiliated with SK Holdings Co., Ltd., formed H2A, which is a joint venture designed to accelerate the use of hydrogen as an alternative energy source in Asian markets.

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our accompanying unaudited interim 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, 2016.~~2020 19-K. In addition to historical information, this Quarterly Report on Form 10-Q and the following discussion contain statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange ~~Act.~~Act of 1934, as amended (the “Exchange Act”). These forward-looking statements contain projections of our future results of operations or of our financial position or state other forward-looking information. In some cases, you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” “would,” “plan,” “projected” or the negative of such words or other similar words or phrases. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Investors are cautioned not to unduly rely on forward-looking statements because they involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including, but not limited to: the risk that we continue to incur losses and might never achieve or maintain profitability; the risk that we will need to raise additional capital to fund our operations and such capital may not be available to us; the risk that our lack

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the risk that we continue to incur losses and might never achieve or maintain profitability;

Table of extensive experience in manufacturing and marketing products may impact our ability to manufacture and market products on a profitable and large-scale commercial basis; the risk that unit orders will not ship, be installed and/or converted to revenue, in whole or in part; the risk that a loss of one or more of our major customers could result in a material adverse effect on our financial condition; the risk that a sale of a significant number of shares of stock could depress the market price of our common stock; Contents

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the risk that we will need to raise additional capital to fund our operations and such capital may not be available to us;

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the risk of dilution to our stockholders and/or stock price should we need to raise additional capital;

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the risk that our lack of extensive experience in manufacturing and marketing products may impact our ability to manufacture and market products on a profitable and large-scale commercial basis;

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the risk that unit orders may not ship, be installed and/or converted to revenue, in whole or in part;

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the risk that a loss of one or more of our major customers, or if one of our major customers delays payment of or is unable to pay its receivables, a material adverse effect could result on our financial condition;

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the risk that a sale of a significant number of shares of stock could depress the market price of our common stock;

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the risk that our convertible senior notes, if settled in cash, could have a material effect on our financial results;

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the risk that our convertible note hedges may affect the value of our convertible senior notes and our common stock;

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the risk that negative publicity related to our business or stock could result in a negative impact on our stock value and profitability;

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the risk of potential losses related to any product liability claims or contract disputes;

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the risk of loss related to an inability to remediate the material weakness identified in internal control over financial reporting as of December 31, 2020, or inability to otherwise maintain an effective system of internal control;

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the risk that the determination to restate the prior period financial statements could negatively affect investor confidence and raise reputational issues;

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the risk of loss related to an inability to maintain an effective system of internal controls;

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our ability to attract and maintain key personnel;

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the risks related to the use of flammable fuels in our products;

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the risk that pending orders may not convert to purchase orders, in whole or in part;

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the cost and timing of developing, marketing and selling our products;

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the risks of delays in or not completing our product development goals;

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the risks involved with participating in joint ventures;

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our ability to obtain financing arrangements to support the sale or leasing of our products and services to customers;

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our ability to successfully pursue new business ventures;

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our ability to achieve the forecasted gross margin on the sale of our products;

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the cost and availability of fuel and fueling infrastructures for our products;

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the risks, liabilities, and costs related to environmental, health and safety matters;

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the risk of elimination of government subsidies and economic incentives for alternative energy products;

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market acceptance of our products and services, including GenDrive, GenSure and GenKey systems;

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our ability to establish and maintain relationships with third parties with respect to product development, manufacturing, distribution and servicing, and the supply of key product components;

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the cost and availability of components and parts for our products;

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the risk that possible new tariffs could have a material adverse effect on our business;

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our ability to develop commercially viable products;

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our ability to reduce product and manufacturing costs;

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our ability to successfully market, distribute and service our products and services internationally;

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our ability to improve system reliability for our products;

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competitive factors, such as price competition and competition from other traditional and alternative energy companies;

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our ability to protect our intellectual property;

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the risk of dependency on information technology on our operations and the failure of such technology;

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the cost of complying with current and future federal, state and international governmental regulations;

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our subjectivity to legal proceedings and legal compliance;

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the risks associated with past and potential future acquisitions; and

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the volatility of our stock price.

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The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance, including factors and risks discussed in the section titled “Risk Factors” included under Part I, Item 1A, below. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or ~~stock could result~~the extent to which any factor, or combination of factors, may cause actual results to differ materially from these contained in ~~a negative impact on~~any forward-looking statements. While forward-looking statements reflect our ~~stock value and profitability; the risk~~good faith beliefs, they are not guarantees of potential losses related to any product liability claims or contract disputes; the risk of loss related to an inability to maintain an effective system of internal controls; our ability to attract and maintain key personnel; the risks related to the use of flammable fuels in our products; the risk that pending orders may not convert to purchase orders, in whole or in part; the cost and timing of developing, marketing and selling our products and our ability to raise the necessary capital to fund such costs; our ability to obtain financing arrangements to support the sale or leasing of our products and services to customers;the ability to achieve the forecasted gross margin on the sale of our products; the cost and availability of fuel and fueling infrastructures for our products; the risk of elimination of government subsidies and economic incentives for alternative energy products; market acceptance of our products and services, including GenDrive units; our ability to establish and maintain relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; the cost and availability of components and parts for our products; our ability to develop commercially viable products; our ability to reduce product and manufacturing costs; our ability to successfully market, distribute and service our products and services internationally; our ability to improve system reliability for our products; competitive factors, such as price competition and competition from other traditional and alternative energy companies; our ability to protect our intellectual property; the cost of complying with current and future federal, state and international governmental regulations; the risks associated with potential future acquisitions; the volatility of our stock price; and other risks and uncertainties discussed under Item IA—Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed March 10, 2017. Readers should not place undue reliance on our forward-looking statements.performance. These forward-looking statements speak only as of the date on which the statements were ~~made and are not guarantees of future performance.~~made. Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q.

~~Overview~~

References in this Quarterly Report on Form 10-Q to “Plug Power,” the “Company,” “we,” “our” or “us” refer to Plug Power Inc., orincluding as the ~~Company,~~context requires, its subsidiaries.

Overview

Plug Power is ~~a leading provider of alternative energy technology focused on~~facilitating the ~~design, development, commercialization~~paradigm shift to an increasingly electrified world by innovating cutting-edge hydrogen and ~~manufacture of hydrogen~~ fuel cell ~~systems used primarily for the material handling and stationary power market.~~

~~Table of Contents~~

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 for resale to customers.

Part of our long-term plan includes Plug Power penetrating the on-road vehicle market and large-scale stationary market. Plug Power’s formation of a joint venture with Renault in Europe and the announced future joint venture with SK Group in Asia not only support this goal but are expected to provide us with a more global footprint. Plug has been successful with acquisitions, strategic partnerships, and joint ventures, and we plan to continue this mix. For example, we expect our relationships with Brookfield and Apex to provide us access to low-cost renewable energy, which is critical to produce low-cost green hydrogen.

Our current products and services include:

GenDrive: GenDrive is our hydrogen fueled PEM fuel cell system providing power to material handling ~~vehicles;~~electric vehicles, including class 1, 2, 3 and 6 electric forklifts, Automated Guided Vehicles (“AGVs”) and ground support equipment;

GenFuel: GenFuel is our liquid hydrogen fueling delivery, generation, storage, and dispensing system;

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ProGen: ProGen is our fuel cell stack and engine technology ~~under development for use~~currently used globally in mobility and stationary fuel cell ~~systems;~~systems, and as engines in electric delivery vans. This includes the Plug “MEA”, a critical component of the fuel cell stack used in zero-emission fuel cell electric vehicle engines; and

We provide our products worldwide through our direct product sales force, and by leveraging relationships with ~~original equipment manufacturers, or OEMs,~~“OEMs” and their dealer networks. Plug Power is targeting Asia and Europe for expansion in adoption. Europe has rolled out ambitious targets for the hydrogen economy and Plug Power is executing on its strategy to become one of the European leaders. This includes a targeted account strategy for material handling as well as securing strategic partnerships with European OEMs, energy companies, utility leaders and accelerating our electrolyzer business. We manufacture our commercially viable products in Latham, New York, Rochester, New York and Spokane, Washington and support liquid hydrogen generation and logistics in Charleston, Tennessee.

Our wholly-owned subsidiary, Plug Power France, created a joint venture with Renault SAS (“Renault”) named HyVia, a French société par actions simplifiée (“HyVia”) in the second quarter of 2021. HyVia plans to manufacture and sell fuel cell powered electric light commercial vehicles (“FCELCVs”) and to supply hydrogen fuel and fueling stations to support the FCE-LCV market, in each case primarily in Europe. HyVia is owned 50% by Plug Power France and 50% by Renault.

Recent Developments

COVID-19 Update

As a result of the COVID-19 pandemic outbreak in March 2020, state governments—including those in New York and Washington, where our manufacturing facilities are located—issued orders requiring businesses that do not conduct essential services to temporarily close their physical workplaces to employees and customers. As a result, we had put in place a number of protective measures in response to the COVID-19 outbreak, which included the canceling of all commercial air travel and all other non-critical travel, requesting that employees limit non-essential personal travel, eliminating all but essential third-party access to our facilities, enhancing our facilities’ janitorial and sanitary procedures, encouraging employees to work from home to the extent their job function enabled them to do so, encouraging the use of virtual employee meetings, and providing staggered shifts and social distancing measures for those employees associated with manufacturing and service operations.

In June 2021, in accordance with revised CDC guidelines and where permitted by state law, employees who were fully vaccinated against COVID-19 and have been through Plug Power’s certification process, were permitted to enter Plug Power facilities without a face covering. Individuals inside Plug Power facilities who did not wish to go through the certification process were required to wear proper face coverings and continued to maintain social distancing of six feet or greater. In states where the guidelines for face coverings was still government mandated, Plug Power complied with the state and local jurisdictions and enforced face mask usage, as well as social distancing at our sites. In early August 2021, we adjusted our guidance as a result of an influx of COVID-19 cases and began requiring all employees and visitors regardless of vaccination status to wear a face-covering at all times while within a Plug Power facility, and strongly encouraged social distancing. We continue to provide enhanced janitorial and sanitary procedures, encourage employees to work from home to the extent their job function enables them to do so, and encourage the use of virtual employee meetings.

We cannot predict at this time the full extent to which COVID-19 will impact our business, results, and financial condition, which will depend on many factors. We are staying in close communication with our manufacturing facilities, employees, customers, suppliers, and partners, and acting to mitigate the impact of this dynamic and evolving situation, but there is no guarantee that we will be able to do so. Many of the parts for our products are sourced from suppliers in China and the manufacturing situation in China remains variable. Supply chain disruptions could reduce the availability

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of key components, increase prices or both, as the COVID-19 pandemic has caused significant challenges for global supply chains resulting primarily in transportation delays. These transportation delays have caused incremental freight charges, which have negatively impacted our results of operations. We expect that these challenges will continue to have an impact on our businesses for the foreseeable future.

We continue to take proactive steps to limit the impact of these challenges and are working closely with our suppliers and transportation vendors to ensure availability of products and implement other cost savings initiatives. In addition, we continue to invest in our supply chain to improve its resilience with a focus on automation, dual sourcing of critical components and localized manufacturing when feasible. To date, there has been limited disruption to the availability of our products, though it is possible that more significant disruptions could occur if these supply chain challenges continue.

Strategic and Other Activities

Entry into Definitive Agreement

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Performance Stock Option Awards

In September 2021, the Compensation Committee approved the grant of performance stock options to the Company’s Chief Executive Officer and certain other executive officers. These performance stock options are subject to both performance-based conditions tied to the achievement of stock price hurdles and time-based vesting; therefore, a Monte Carlo Simulation was utilized to determine the grant date fair value with the associated expense recognized over the requisite service period. The design of the performance options was developed with input from the Company’s independent compensation consultant. The performance stock options are strongly aligned with the Company’s culture of pay for performance and will ensure the executive team’s commitment and focus on delivering significant increases in stockholder value over the three-year performance period. Up to one-third (1/3) the performance stock options will vest and become exercisable on each of the first three anniversaries of the grant date, provided that the volume weighted average price of the Company’s common stock during any 30 consecutive trading day period in the three year performance period following the grant date of the stock options (“VWAP”) equals or exceeds certain levels. For the Company’s Chief Executive Officer, 25% of his performance stock options will be deemed to have satisfied the performance-based conditions and will be eligible to be exercised over time if the VWAP equals or exceeds $35; an additional 25% of his options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $50; an additional 16.675% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $65; an additional 16.65% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $80; and the remaining 16.675% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $100. There will be no interpolation for the Chief Executive Officer’s performance stock option if the VWAP falls between any two stock price hurdles, unless in the event of a change in control. For executive officers other than the Chief Executive Officer, 25% of the performance stock options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals $35; an additional 25% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals $50; and the remaining 50% of the options will be deemed to have satisfied the performance-based condition and will be eligible to be exercised if the VWAP equals or exceeds $100. If the VWAP falls between two of the stock price hurdles, an incremental number of options will become exercisable based on linear interpolation in $1 increments. Failure to achieve any of the stock price hurdles applicable to a performance stock option during the three-year performance period will result in the applicable options not becoming exercisable. The performance-based stock options have a maximum term of seven years from the grant date.

Explanatory Note

As previously disclosed in the Explanatory Note to the 2020 10-K, the Company restated its previously issued audited consolidated financial statements as of and for the years ended December 31, 2019 and 2018 and its unaudited interim condensed consolidated quarterly financial statements of and for each of the quarterly periods ended March 31, 2020, June 30, 2020 and 2019, September 30, 2020 and 2019 and December 31, 2019.

Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q for the periods affected by the restatement have not been amended. Accordingly, investors should not rely upon the Company’s previously released financial statements for these periods and any earnings releases or other communications relating to these periods, and, for these periods, investors should rely solely on the financial statements and other financial data for the relevant periods included in the 2020 10-K. Commencing with our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, we are including in our quarterly reports for fiscal 2021 restated results for the corresponding interim periods of fiscal 2020.

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Results of Operations

~~Revenue, cost of revenue, gross (loss)/profit and gross margin for the three and nine months ended September 30, 2017 and 2016, were as follows (in thousands):~~

Three Months Ended

Nine Months Ended

September 30,

September 30,



Net

Cost of

Gross

Gross

Net

Cost of

Gross

Gross

Revenue

Revenue

(Loss)/Profit

Margin

Revenue

Revenue

(Loss)/Profit

Margin

For the periods ended September 30, 2017:

Sales of fuel cell systems and related infrastructure

$
45,179

$
35,671

$
9,508

21.0
%

$
55,936

$
44,398

$
11,538

20.6
%
Services performed on fuel cell systems and related infrastructure

5,842

5,766

76

1.3
%

16,040

17,400

(1,360)

(8.5)
%
Power Purchase Agreements

5,428

7,395

(1,967)

(36.2)
%

14,684

21,460

(6,776)

(46.1)
%
Fuel delivered to customers

4,850

5,810

(960)

(19.8)
%

12,327

15,262

(2,935)

(23.8)
%
Other

128

138

(10)

(7.8)
%

279

301

(22)

(7.9)
%
Provision for common stock warrants

(26,057)

—

(26,057)

—

(27,877)

—

(27,877)

—

Total

$
35,370

$
54,780

$
(19,410)

(54.9)
%

$
71,389

$
98,821

$
(27,432)

(38.4)
%
For the periods ended September 30, 2016:

Sales of fuel cell systems and related infrastructure

$
5,653

$
4,241

$
1,412

25.0
%

$
19,992

$
16,182

$
3,810

19.1
%
Services performed on fuel cell systems and related infrastructure

4,763

4,481

282

5.9
%

15,396

16,190

(794)

(5.2)
%
Power Purchase Agreements

3,858

4,464

(606)

(15.7)
%

9,626

10,961

(1,335)

(13.9)
%
Fuel delivered to customers

2,909

3,679

(770)

(26.5)
%

7,557

9,298

(1,741)

(23.0)
%
Other

376

313

63

16.8
%

779

855

(76)

(9.8)
%
Provision for loss contracts related to service

—

—

—

—

—

(1,071)

1,071

—

Total

$
17,559

$
17,178

$
381

2.2
%

$
53,350

$
52,415

$
935

1.8
%

Our primary sources of revenue are from sales of fuel cell systems and related infrastructure, services performed on fuel cell systems and related infrastructure, ~~PPAs,~~Power Purchase Agreements (PPAs), and fuel delivered to customers. Revenue from sales of fuel cell systems and related infrastructure represents sales of our GenDrive units, GenSure stationary backup power units, as well as hydrogen fueling infrastructure. Revenue from services performed on fuel cell systems and related infrastructure represents revenue earned on our service and maintenance contracts and sales of spare parts. Revenue from PPAs primarily represents payments received from customers who make monthly payments to access the Company’s GenKey solution. Revenue associated with fuel delivered to customers represents the sale of hydrogen to customers that has been purchased by the Company from a third ~~party.~~party or generated on site.

Net revenue, cost of revenue, gross profit (loss) and gross margin for the three and nine months ended September 30, 2021 and 2020, were as follows (in thousands):



	Three Months Ended								Nine Months Ended
	September 30,								September 30,
			Cost of		Gross		Gross				Cost of		Gross		Gross
	Net Revenue		Revenue		Profit/(Loss)		Margin		Net Revenue		Revenue		Profit/(Loss)		Margin
For the period ended September 30, 2021:
Sales of fuel cell systems and related infrastructure	$	115,999	$	89,235	$	26,764	23.1	%	$	262,049	$	198,122	$	63,927	24.4	%
Services performed on fuel cell systems and related infrastructure		6,677		18,697		(12,020)	(180.0)	%		18,397		47,258		(28,861)	(156.9)	%
Provision for loss contracts related to service		—		7,462		(7,462)	N/A			—		15,641		(15,641)	N/A
Power Purchase Agreements		9,321		31,199		(21,878)	(234.7)	%		25,508		71,776		(46,268)	(181.4)	%
Fuel delivered to customers		11,556		27,857		(16,301)	(141.1)	%		33,804		90,331		(56,527)	(167.2)	%
Other		369		550		(181)	(49.1)	%		679		856		(177)	(26.1)	%
Total	$	143,922	$	175,000	$	(31,078)	(21.6)	%	$	340,437	$	423,984	$	(83,547)	(24.5)	%
For the period ended September 30, 2020:
Sales of fuel cell systems and related infrastructure	$	83,662	$	69,428	$	14,234	17.0	%	$	151,876	$	117,290	$	34,586	22.8	%
Services performed on fuel cell systems and related infrastructure		6,829		9,180		(2,351)	(34.4)	%		19,586		27,300		(7,714)	(39.4)	%
Provision for loss contracts related to service		—		25,147		(25,147)	N/A			—		25,948		(25,948)	N/A
Power Purchase Agreements		6,629		14,744		(8,115)	(122.4)	%		19,629		44,019		(24,390)	(124.3)	%
Fuel delivered to customers		9,831		17,002		(7,171)	(72.9)	%		24,536		39,332		(14,796)	(60.3)	%
Other		97		131		(34)	(35.1)	%		235		275		(40)	(17.0)	%
Total	$	107,048	$	135,632	$	(28,584)	(26.7)	%	$	215,862	$	254,164	$	(38,302)	(17.7)	%

The amount of provision for common stock warrants recorded as a reduction of revenue during the three and nine months ended September 30, 2021 and 2020, respectively, is shown in the table below (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020

Sales of fuel cell systems and related infrastructure	$	—	$	(16,146)	$	(27)	$	(19,287)
Services performed on fuel cell systems and related infrastructure		(69)		(688)		(340)		(1,412)
Power Purchase Agreements		(652)		(758)		(2,454)		(1,887)
Fuel delivered to customers		(573)		(1,034)		(1,925)		(2,612)
Total	$	(1,294)	$	(18,626)	$	(4,746)	$	(25,198)

Net Revenue

Revenue –sales of fuel cell systems and related infrastructure. Revenue from sales of fuel cell systems and related infrastructure represents revenue from the sale of our fuel cells, such as GenDrive units and GenSure stationary backup power units, as well as hydrogen fueling infrastructure referred to at the site level as hydrogen installations.

Revenue from sales of fuel cell systems and related infrastructure for the three months ended September 30, ~~2017~~2021 increased ~~$39.5~~$32.3 million, or ~~699.2%~~38.7%, to ~~$45.2~~$116.0 million from ~~$5.7~~$83.7 million for the three months ended September 30, ~~2016. There were 2,239 units recognized as~~2020. Included within revenue was a provision for common stock warrants of $0 and $16.1 million for the three months ended September 30, ~~2017, compared to 189~~2021 and 2020, respectively. The main drivers for the

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~~three months ended September 30, 2016. The significant~~ increase in revenue ~~relates to eight sites deployed during~~were the 3rd ~~quarter~~increase in GenDrive units recognized as revenue,

Table of ~~2017. An additional 337~~Contents

an increase in hydrogen installations and a decrease in the provision for common stock warrants. There were 4,559 GenDrive units ~~were shipped~~recognized as revenue during the three months ended September 30, ~~2017 and held as leased assets. As such,~~2021, compared to 3,709 for the ~~Company will recognize~~three months ended September 30, 2020. There was hydrogen infrastructure revenue ~~on these units over the life of the related PPA under “Power Purchase Agreements” in the Consolidated Statement of Operations. The eight~~associated with 16 hydrogen sites ~~also had hydrogen installations~~ during the three months ended September 30, 2017. In addition, one additional site was constructed and held as leased assets. There was one sale associated with hydrogen installations for the three months ended September 30, 2016. In addition, three additional sites were constructed and held as leased property2021, compared to 13 during the three months ended September 30, ~~2016, also because they were associated with sale/leaseback transactions accounted for capital leases.~~2020.

Revenue from sales of fuel cell systems and related infrastructure for the nine months ended September 30, ~~2017~~2021 increased ~~$35.9~~$110.2 million, or ~~179.8%~~72.5%, to ~~$55.9~~$262.1 million from ~~$20.0~~$151.9 million for the nine months ended September 30, ~~2016. The main driver~~2020. Included within revenue was a provision for ~~the increased revenue is related to the 3rd quarter deployment volume as well as a few other smaller sites. There were 2,580 units recognized as revenue~~common stock warrants of $27 thousand and $19.3 million for the nine months ended September 30, ~~2017,~~2021 and 2020, respectively. The main drivers for the increase in revenue were the increase in GenDrive units recognized as revenue, an increase in hydrogen installations and a decrease in the provision for common stock warrants. There were 9,533 GenDrive units recognized as revenue during the nine months ended September 30, 2021, compared to ~~603~~7,217 for the nine months ended September 30, ~~2016. An additional 1,265 units were shipped~~2020. There was hydrogen infrastructure revenue associated with 38 hydrogen sites during the nine months ended September 30, 2017 and held as leased assets. As such, the Company will recognize revenue on these units over the life of the related PPA under “Power Purchase Agreements” in the Consolidated Statement of Operations. Ten sales associated with hydrogen installations occurred2021, compared to 18 during the nine months ended September 30, 2017. In addition, five additional sites were constructed and held as leased assets. There were four sales associated with hydrogen installations for the nine months ended September 30, 2016. In addition, nine additional sites were constructed and held as leased property during the nine months ended September 30, 2016, also because they were associated with sale/leaseback transactions accounted for as capital leases.2020.

Revenue – services performed on fuel cell systems and related ~~infrastructure.~~ infrastructure. Revenue from services performed on fuel cell systems and related infrastructure represents revenue earned on our service and maintenance contracts and sales of spare parts. At September 30, ~~2017,~~2021, there were ~~10,670~~18,685 fuel cell units and 4078 hydrogen installations under extended maintenance contracts, ~~increases of 23.1%~~an increase from 13,421 fuel cell units and ~~48.1% from 8,665 and 27~~56 hydrogen installations at September 30, ~~2016, respectively.~~

2020. Revenue from services performed on fuel cell systems and related infrastructure for the three months ended September 30, ~~2017 increased $1.1~~2021 decreased $0.2 million, or ~~22.7%~~2.2%, to ~~$5.8~~$6.7 million ~~from $4.8~~as compared to $6.8 million for the three months ended September 30, ~~2016.~~2020. Included within revenue was provision for common stock warrants of $69 thousand and $688 thousand for the three months ended September 30, 2021 and 2020, respectively. The ~~positive change is related to higher~~main drivers in decrease in revenue was a reduction in billings for run time hours that exceeded certain levels given certain changes in the overall contract, partially offset by the decrease in the provision for common stock warrants. Although the number of ~~fuel cell~~ units ~~as well as related infrastructure being serviced than compared to~~and sites grew year over year, many of the ~~comparable quarter~~units and sites deployed in the ~~prior year.~~third quarter of 2021 were deployed late in the quarter and hence the full impact of associated service revenues will commence in the fourth quarter of 2021.

Revenue from services performed on fuel cell systems and related infrastructure for the nine months ended September 30, ~~2017 increased $644 thousand,~~2021 decreased $1.2 million, or ~~4.2%~~6.1%, to ~~$16.0~~$18.4 million ~~from $15.4~~as compared to $19.6 million for the nine months ended September 30, ~~2016.~~2020. Included within revenue was provision for common stock warrants of $340 thousand and $1.4 million for the nine months ended September 30, 2021 and 2020, respectively. The ~~increase~~main drivers in ~~service revenues~~decrease in revenue was ~~not as significant as~~a reduction in billings for run time hours that exceeded certain levels given certain changes in the ~~increase~~overall contract, partially offset by the decrease in the provision for common stock warrants. Although the number of units ~~under~~and sites grew year over year, many of the units and sites deployed in the third quarter of 2021 were deployed late in the quarter and hence the full impact of associated service ~~contracts due to less billable incidents and nonrecurring revenue.~~revenues will commence in the fourth quarter of 2021.

Revenue – Power Purchase Agreements. Revenue from PPAs represents payments received from customers for power generated through the provision of equipment and service. The equipment and service can be associated with sale/leaseback transactions in which the Company sells fuel cell systems and related infrastructure to a third-party, leases them back and operates them at customers’ locations who are parties to PPAs with the Company. Alternatively, the Company can retain the equipment as leased property and provide it to customers under PPAs. At September 30, ~~2017,~~2021, there were 3061 GenKey sites associated with PPAs, as compared to 2336 at September 30, ~~2016.~~

~~Power Purchase Agreements~~2020. Revenue from PPAs for the three months ended September 30, ~~2017~~2021 increased ~~$1.6~~$2.7 million, or ~~40.7%~~40.6%, to ~~$5.4~~$9.3 million from ~~$3.9~~$6.6 million for the three months ended September 30, ~~2016.~~2020. Included within revenue was provision for common stock warrants of $652 thousand and $758 thousand for the three months ended September 30, 2021 and 2020, respectively. The increase ~~is due~~in revenue from PPAs for the three months ended September 30, 2021 as compared to the ~~increased number of~~three months ended September 30, 2020 was primarily attributable to the new sites for existing customers and new customers accessing the ~~Company has deployed with these types of arrangements.~~PPA subscription solution, and a slight decrease in the provision for common stock warrants.

~~Power Purchase Agreements~~Revenue from PPAs for the nine months ended September 30, ~~2017~~2021 increased ~~$5.1~~$5.9 million, or ~~52.5%~~30.0%, to ~~$14.7~~$25.5 million from ~~$9.6~~$19.6 million for the nine months ended September 30, ~~2016.~~2020. Included within revenue was provision for common stock warrants of $2.5 million and $1.9 million for the nine months ended September 30, 2021 and 2020, respectively. The increase ~~is due~~in revenue from PPAs for the nine months ended September 30, 2021 as compared to the ~~increased number~~nine months ended September 30, 2020 was primarily attributable to the new sites for existing customers and new customers accessing the PPA subscription solution, offset in part by the increase in the provision for common stock warrants.

Table of ~~sites the Company has deployed with these types of arrangements.~~Contents

Revenue – fuel delivered to ~~customers.~~customers. Revenue associated with fuel delivered to customers represents the sale of hydrogen to customers that has been purchased by the Company from a third ~~party. As part of the GenKey solution, the Company contracts with fuel suppliers to purchase liquid hydrogen, which is then sold to its customers. At September~~

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30, 2017, there were 55 sites associated with fuel contracts, as compared to 35 at September 30, 2016. The sites generally are the same as those which had purchased hydrogen installations within the GenKey solution.

party or generated on site. Revenue associated with fuel delivered to customers for the three months ended September 30, ~~2017~~2021 increased ~~$1.9~~$1.7 million, or ~~66.7%~~17.5%, to ~~$4.9~~$11.6 million from ~~$2.9~~$9.8 million for the three months ended September 30, ~~2016.~~2020. Included within revenue was provision for common stock warrants of $573 thousand and $1.0 million for the three months ended September 30, 2021 and 2020, respectively. The increase in revenue iswas due to an increase in the number of sites ~~taking~~with fuel ~~deliveries at~~contracts from 94 as of September 30, ~~2017, compared~~2020 to 141 as of September 30, ~~2016.~~2021, and a slight decrease in the provision for common stock warrants. A number of the new sites had not received fuel as of September 30, 2021, and therefore the increase in revenue from the third quarter of 2021 was not proportionate to the increase in new sites.

Revenue associated with fuel delivered to customers for the nine months ended September 30, ~~2017~~2021 increased ~~$4.8~~$9.3 million, or ~~63.1%~~37.8%, to ~~$12.3~~$33.8 million from ~~$7.6~~$24.5 million for the nine months ended September 30, ~~2016. The increase in revenue is due to an increase of sites taking fuel deliveries at September 30, 2017, compared to September 30, 2016.~~

~~Revenue – other.~~ Other revenue primarily represents cost reimbursement research and development contracts associated with the development of PEM fuel cell technology. We generally share in the cost of these programs with our cost-sharing percentages ranging from 30% to 50% of total project costs. Revenue from time and material contracts is recognized on the basis of hours expended plus other reimbursable contract costs incurred during the period. We expect to continue certain research and development contract work that is related to our current product development efforts. Other miscellaneous revenue is recognized from time to time.

Other revenue for the three months ended September 30, 2017 decreased $248 thousand, or 66.0%, to $128 thousand from $376 thousand for the three months ended September 30, 2017. During the three months ended September 30, 2017, the Company’s other2020. Included within revenue was associated with a research & development project with the European Union. The Company had no revenue associated with a customer stack development program as it did in the three months ended September 30, 2016 which wasprovision for ~~$125 thousand.~~

~~Other revenue~~common stock warrants of $1.9 million and $2.6 million for the nine months ended September 30, ~~2017 decreased $500 thousand, or 64.2%,~~2021 and 2020, respectively. The increase in revenue was due to ~~$279 thousand~~an increase in the number of sites with fuel contracts from ~~$779 thousand for the nine months ended~~94 as of September 30, ~~2017. During the nine months ended~~2020 to 141 as of September 30, ~~2017, the Company’s other revenue was associated with~~2021, and a ~~research & development project with the European Union. The Company had no revenue associated with a customer stack development program as it did~~slight decrease in the ~~nine months ended September 30, 2016 which was for $375 thousand.~~

~~Revenue –~~ provision for common stock warrants. In 2017, the Company entered into two Transaction Agreements (the “Amazon Transaction Agreement”) with Amazon.com, Inc. (“Amazon”) and (the “Walmart Transaction Agreement”) with Wal-Mart Stores, Inc. (“Walmart”). The Company records a portionA number of the ~~estimated fair value~~new sites had not received fuel as of ~~common stock warrants issued as part~~September 30, 2021, and therefore the increase in revenue from the third quarter of ~~the Amazon Transaction Agreement and the Walmart Transaction Agreement as a reduction of revenue based upon the projected number of common stock warrants expected to vest, theproportion of purchases by Amazon, Walmart and their affiliates within the period relative~~2021 was not proportionate to the ~~aggregate purchase levels required for the Amazon Warrant Shares and the Walmart Warrant Shares to vest and the then-current fair value~~increase in new sites.

Cost of the related common stock warrants. The amount of provision for common stock warrants recorded as a reduction of revenue during the three and nine months ended September 30, 2017 was $26.1 million and $27.9 million, respectively.Revenue

Cost of revenue – sales of fuel cell systems and related infrastructure. Cost of revenue from sales of fuel cell systems and related infrastructure includes direct materials, labor costs, and allocated overhead costs related to the manufacture of our fuel cells such as GenDrive units and GenSure stationary backup power units, ~~as well as~~and hydrogen fueling infrastructure referred to at the site level as hydrogen installations.

Cost of revenue from sales of fuel cell systems and related infrastructure for the three months ended September 30, ~~2017~~2021 increased ~~741.1%~~28.5%, or ~~$31.4~~$19.8 million, to $89.2 million, compared to $69.4 million for the three months ended September 30, ~~2016,~~2020. This increase was driven by ~~a greater number of~~the increase in GenDrive deployment volume and increase in hydrogen installations, as well as certain unexpected costs, including varied COVID related issues such as increased freight and material costs and higher labor costs given staffing and coverage issues. There were 4,559 GenDrive units recognized as ~~revenue.~~revenue during the three months ended September 30, 2021, compared to 3,709 for the three months ended September 30, 2020. Revenue associated with 16 hydrogen installations was recognized during the three months ended September 30, 2021, compared to 13 during the three months ended September 30, 2020. Gross ~~margin~~profit generated from sales of fuel cell systems and related infrastructure ~~was 21.0%~~increased to 23.1% for the three months ended September 30, ~~2017, down from 25.0%~~2021, compared to 17.0% for the three months ended September 30, ~~2016,~~2020 primarily due to ~~product~~a decrease in the reduction of revenue for warrants for sales of fuel cell systems and ~~site mix changes during~~related infrastructure of $16.1 million. For the three months ended September 30, ~~2017 compared~~2021 and 2020, the reduction of revenue for warrants was $0 and $16.1 million, respectively. We expect these cost trends will continue into the end of 2021, but begin to abate once the ~~same period in 2016.~~global supply chain has normalized.

Cost of revenue from sales of fuel cell systems and related infrastructure for the nine months ended September 30, ~~2017~~2021 increased ~~174.4%~~68.9%, or ~~$28.2~~$80.8 million, to $198.1 million, compared to ~~the nine months ended September 30, 2016, driven by driven by the previously stated greater number of units recognized as revenue. Gross margin generated from sales of fuel cell~~

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~~systems and related infrastructure was 20.6%~~$117.3 million for the nine months ended September 30, ~~2017, up from 19.1%~~2020. This increase was driven by the increase in GenDrive deployment volume and increase in hydrogen installations, as well as certain unexpected costs, including varied COVID related issues such as increased freight and material costs and higher labor costs given staffing and coverage issues. There were 9,533 GenDrive units recognized as revenue during the nine months ended September 30, 2021, compared to 7,217 for the nine months ended September 30, ~~2016, due to product and site mix changes in prior 2017 quarters~~2020. Revenue associated with 38 hydrogen installations was recognized during the nine months ended September 30, ~~2017~~2021, compared to 18 during the ~~same period~~nine months ended September 30, 2020. Gross profit generated from sales of fuel cell systems and related infrastructure increased to 24.4% for the nine months ended September 30, 2021, compared to 22.8% for the nine months ended September 30, 2020 primarily due to a decrease in ~~2016.~~the reduction of revenue for warrants for sales of fuel cell systems and related infrastructure of $19.3 million. For the nine months ended September 30, 2021 and 2020, the reduction of revenue for warrants was $0 and $19.3 million, respectively. We expect these cost trends will continue into the end of 2021, but begin to abate once the global supply chain has normalized.

Cost of revenue – services performed on fuel cell systems and related ~~infrastructure.~~ infrastructure. Cost of revenue from services performed on fuel cell systems and related infrastructure includes the labor, material costs and allocated overhead

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costs incurred for our product service and hydrogen site maintenance contracts and spare parts. OnAt September 30, ~~2017,~~2021, there were ~~10,670~~18,685 fuel cell units and 4078 hydrogen installations under extended maintenance contracts, an increase ~~of 16.8%~~from 13,421 fuel cell units and ~~48.1% from 8,665 and 27 on~~56 hydrogen installations at September 30, ~~2016,~~2020, respectively.

Cost of revenue from services performed on fuel cell systems and related infrastructure for the three months ended September 30, ~~2017~~2021 increased ~~28.7%~~103.7%, or ~~$1.3~~$9.5 million, to ~~$5.8~~$18.7 million, compared to ~~the three months ended September 30, 2016 of $4.5 million. Gross margin decreased to 1.3%~~$9.2 million for the three months ended September 30, ~~2017 from 5.9%~~2020. The increase in cost of revenue was due primarily to increase in volume and certain unexpected costs, including varied COVID related issues such as increased freight and material costs, higher labor costs given staffing and coverage issues, and scrap charges associated with certain parts. Gross loss increased to (180.0)% for the three months ended September 30, ~~2016. The change versus~~2021, compared to (34.4)% for the ~~prior year is~~three months ended September 30, 2020, primarily due to ~~ramp up and commercialization~~certain unexpected costs, including varied COVID related issues, scrap charges associated with certain parts as well as a reduction in billings for run time hours that exceeded certain levels given certain changes in the ~~launch of new configurations developed in 2016,~~overall contract, partially offset by a ~~reduction~~change in ~~costs resulting from changes in product configuration rolled out to new key accounts and leverage~~the release of the ~~existing fixed costs in~~previously recorded loss accrual from $314 thousand during the ~~field.~~three months ended September 30, 2020 to $2.3 million during the three months ended September 30, 2021. We expect these cost trends will continue into the end of 2021, but begin to abate once the global supply chain has normalized.

Cost of revenue from services performed on fuel cell systems and related infrastructure for the nine months ended September 30, ~~2017~~2021 increased ~~7.5%~~73.1%, or ~~$1.2~~$20.0 million, to ~~$17.4~~$47.3 million, compared to ~~the nine months ended September 30, 2016 of $16.2 million. Gross margin worsened to (8.5%)~~$27.3 million for the nine months ended September 30, ~~2017~~2020. The increase in cost of revenue was due primarily to certain unexpected costs, including varied COVID related issues such as increased freight costs, certain vendor transition and force majeure issues that impacted hydrogen infrastructure service costs, and scrap charges associated with certain parts. At September 30, 2021, there were 18,685 fuel cell units and 78 hydrogen installations under extended maintenance contracts, an increase from ~~(5.2%)~~13,421 fuel cell units and 56 hydrogen installations at September 30, 2020, respectively. Gross loss increased to (156.9)% for the nine months ended September 30, ~~2016. The change versus~~2021, compared to (39.4)% for the ~~prior year is~~nine months ended September 30, 2020, primarily due to ~~ramp up~~certain unexpected costs including varied COVID related issues, certain vendor transition and ~~commercialization~~force majeure issues that impacted hydrogen infrastructure service costs, and scrap charges associated with certain parts, as well as a reduction in billings for run time hours that exceeded certain levels given certain changes in the ~~launch of new configurations developed in 2016,~~overall contract. This was partially offset by a ~~reduction in costs resulting from changes in product configuration rolled out to new key accounts and leverage~~release of the ~~existing fixed costs~~previously recorded loss accrual from $839 thousand during the nine months ended September 30, 2020 to $6.1 million during the nine months ended September 30, 2021. We expect these cost trends will continue into the end of 2021, but begin to abate once the global supply chain has normalized.

Cost of revenue – provision for loss contracts related to service. The Company also recorded a provision for loss contracts related to service of $7.5 million for the three months ended September 30, 2021, compared to $25.2 million for the three months ended September 30, 2020. The decrease in the ~~field.~~provision for loss contracts related to service was primarily a function of a higher provision in 2020, due to an increase in estimated projected cost to service fuel cell systems and related infrastructure, as the Company determined in the third quarter of 2020 that certain cost down initiatives were taking longer to achieve than originally estimated. This was offset by the increase in the provision as a result of more new sites under service contract during the three months ended September 30, 2021 as compared to number of sites for the three months ended September 30, 2020. In addition, the Company determined during the third quarter of 2020 that the projected provision for the Amazon Warrant would be significantly higher than previously estimated.

The Company also recorded a provision for loss contracts related to service of $15.6 million for the nine months ended September 30, 2021, compared to $26.0 million for the nine months ended September 30, 2020. The decrease in the provision for loss contracts related to service was primarily a function of a higher provision in 2020, due to an increase in estimated projected cost to service fuel cell systems and related infrastructure, as the Company determined in the third quarter of 2020 that certain cost down initiatives were taking longer to achieve than originally estimated. This was offset by the increase in the provision as a result of more new sites under service contract during the nine months ended September 30, 2021 as compared to number of sites for the three months ended September 30, 2020. In addition, the Company determined during the third quarter of 2020 that the projected provision for the Amazon Warrant would be significantly higher than previously estimated.

Cost of revenue – Power Purchase ~~Agreements.~~Agreements. Cost of revenue from PPAs includes ~~payments made~~depreciation of assets utilized and service costs to fulfill PPA obligations and interest costs associated with certain financial institutions for leased equipment and service used to fulfill the PPAs. Leased units are primarily associated with sale/leaseback transactions in which the Company sells fuel cell systems and related infrastructure to a third-party, leases them back, and operates them at customers’ locations who are parties to PPAs with the Company. Alternatively, the Company can hold the equipment for investment and recognize the depreciation and service cost of the assets as cost of revenue from PPAs.equipment. At September 30, ~~2017,~~2021, there were 3061 GenKey sites associated with PPAs, as compared to 2336 at September 30, ~~2016.~~

2020. Cost of revenue from ~~Power Purchase Agreements~~PPAs for the three months ended September 30, ~~2017~~2021 increased ~~$2.9~~111.6%, or $16.5 million, ~~or 65.7%,~~

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to ~~$7.4~~$31.2 million from ~~$4.5~~$14.7 million for the three months ended September 30, ~~2016. The increase was a result of~~2020 due to the increase in ~~the number~~units and sites under PPA contract as well as certain COVID related issues such as increased freight costs, scrap charges associated with certain parts and an impairment charge of ~~customer sites party~~$1.3 million. Gross loss increased to ~~these agreements. Gross margin declined to (36.2%)~~(234.7)% for the three months ended September 30, ~~2017 from (15.7%)~~2021, as compared to (122.4)% for the three months ended September 30, ~~2016,~~2020 primarily due ~~primarily~~ to ~~ramp up and commercialization costs incurred that are~~certain COVID related issues, scrap charges associated with ~~the launch~~certain parts, and an impairment charge of ~~new configurations in late 2016.~~$1.3 million.

Cost of revenue from ~~Power Purchase Agreements~~PPAs for the nine months ended September 30, ~~2017~~2021 increased ~~$10.5~~63.1%, or $27.8 million, ~~or 95.8%,~~ to ~~$21.5~~$71.8 million from ~~$11.0~~$44.0 million for the nine months ended September 30, ~~2016. The increase was a result of~~2020 primarily due to the increase in ~~the number~~units and sites under PPA contract as well as certain COVID related issues such as increased freights costs, certain force majeure issues that impacted hydrogen infrastructure service costs, scrap charges associated with certain parts and an impairment charge of ~~customer sites party~~$1.3 million. Gross loss increased to ~~these agreements. Gross margin declined to (15.7%)~~(181.4)% for the nine months ended September 30, ~~2017 from (13.9%)~~2021, as compared to (124.3)% for the nine months ended September 30, ~~2016,~~2020 primarily due ~~primarily~~ to ~~ramp up and commercialization~~certain COVID related issues, certain force majeure issues that impacted hydrogen infrastructure service costs, ~~incurred that are~~scrap charges associated with ~~the launch~~certain parts, and an impairment charge of ~~new configurations in late 2016.~~$1.3 million.

Cost of revenue – fuel delivered to customers. Cost of revenue from fuel delivered to customers represents the purchase of hydrogen from suppliers that ultimately is sold to ~~customers. As part of the GenKey solution, the Company contracts with fuel suppliers to purchase liquid hydrogen~~customers and separately sells to its customers upon delivery. As of September 30, 2017, there were 55 sites under contract receiving molecule delivery, as compared to 35 at September 30, 2016. The sites generally are the same as those which had purchased hydrogen installations within the GenKey solution.

costs for onsite generation. Cost of revenue from fuel delivered to customers for the three months ended September 30, ~~2017~~2021 increased ~~$2.1~~63.8%, or $10.9 million, ~~or 57.9%,~~ to ~~$5.8~~$27.9 million from ~~$3.7~~$17.0 million for the three months ended September 30, ~~2016.~~2020. The increase iswas primarily due ~~primarily~~ to higher volume of ~~liquid~~ hydrogen delivered to customer sites as a result of an increase in the number of

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hydrogen installations completed under GenKey agreements, costs associated with managing availability of molecule in the supply chain as well as a shortage of delivery capability (both drivers and delivery assets), and higher fuel costs. ~~Gross margin percent~~As a result of these higher costs, gross loss increased to ~~(19.8%)~~(141.1)% during the three months ended September 30, ~~2017 from (26.5%)~~2021, compared to (72.9)% during the three months ended September 30, ~~2016 due~~2020. We expect higher hydrogen molecule costs to ~~improved operating dispensing efficiencies and higher fees charged to customers for new sites.~~continue at least through 2021.

Cost of revenue from fuel delivered to customers for the nine months ended September 30, ~~2017~~2021 increased ~~$6.0~~129.7%, or $51.0 million, ~~or 64.1%,~~ to ~~$15.3~~$90.3 million from ~~$9.3~~$39.3 million for the nine months ended September 30, ~~2016.~~2020. The increase iswas primarily due ~~primarily~~ to higher volume of ~~liquid~~ hydrogen delivered to customer sites as a result of an increase in the number of hydrogen installations completed under GenKey agreements, and higher fuel costs. Also significantly impacting the cost of fuel for the nine months ended September 30, 2021 was a vendor transition and force majeure events primarily related to hydrogen plant shutdowns. Gross ~~margin percent was relatively consistent~~loss increased to ~~(23.8%)~~(167.2)% during the nine months ended September 30, ~~2017~~2021, compared to ~~(23.0%)~~(60.3)% during the nine months ended September 30, ~~2016.~~

~~Cost of revenue – other.~~ ~~Other~~2020. The increased gross loss is primarily due to the vendor transition and force majeure issues mentioned above. The cost ~~of revenue primarily represents costs~~ associated with ~~research and development contracts including: cash and non-cash compensation and benefits for engineering and related support staff, fees paid~~the vendor transition amounted 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 research and development contracts.

~~Cost of other revenue for the three months ended September 30, 2017 decreased $175 thousand, or 55.9%, to $138 thousand from $313 thousand~~approximately $16.3 million for the nine months ended September 30, ~~2016.~~2021, which were recorded in the Company’s unaudited interim condensed consolidated statement of operations as cost of revenue – fuel delivered to customers. The Company ~~had no costs associated with a customer stack development program as it did in~~also purchased certain fuel tanks from the ~~three months ended September 30, 2016. The entire cost of other revenue in the period is related to the research & development project with the European Union.~~

~~Cost of other revenue for~~fuel provider during the nine months ended September 30, ~~2017 decreased $554 thousand, or 64.8%,~~2021. We expect higher hydrogen molecule costs to $301 thousand from $855 thousand for the nine months ended September 30, 2016. The Company had no costs associated with a customer stack development program as it did in the nine months ended September 30, 2016. The entire cost of other revenue in the period is related to the research & development project with the European Union.continue at least through 2021.

~~Cost of revenue – provision for loss contracts related to service.~~ In 2015, the Company recognized a $10.1 million provision for loss contracts related to service. This provision represents extended maintenance contracts that have projected costs over the remaining life of the contracts that exceed contractual revenues. During the three and nine months ended September 30, 2017 and 2016, the Company did not have a provision for loss contracts related to service. During the three and nine months ended September 30, 2016, the Company renegotiated one of its service contracts and replaced 96 of the older fuel cell systems in service at that particular customer. As a result, the projected costs over the remaining life of the amended contract were estimated to be reduced as compared to the previous estimate, resulting in a lower necessary accrual. The change in estimate was recorded as a gain within cost of revenue where the original charge was recorded.

Expenses

Research and development expense. Research and development (“R&D”) expense includes: materials to build development and prototype units, cash and non-cash compensation and benefits for the engineering and related staff, expenses for contract engineers, 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 associated with our research and development activities.

Research and development expense for the three months ended September 30, ~~2017~~2021 increased ~~$2.4~~$9.2 million, or ~~48.7%~~125.2%, to ~~$7.4~~$16.6 million, from ~~$5.0~~$7.4 million for the three months ended September 30, ~~2016. This increase~~2020. The overall growth in R&D investment is commensurate with the Company’s future expansion into new markets, new product lines, and varied vertical integrations. The average number of R&D employees was ~~primarily related~~139 at September 30, 2020 compared to an increase in development of ProGen, and personnel related expenses from higher headcount, focused on refinement of hydrogen infrastructure design, multiple product cost-down programs and prototyping for stack performance enhancement.264 at September 30, 2021.

Research and development expense for the nine months ended September 30, ~~2017~~2021 increased ~~$5.0~~$20.6 million, or ~~33.4%~~120.9%, to ~~$20.1~~$37.6 million, from ~~$15.0~~$17.0 million for the nine months ended September 30, ~~2016. This increase was primarily related to an increase~~2020. The overall growth in development of ProGen, and personnel related expenses from higher headcount, focused on refinement of hydrogen infrastructure design, multiple product cost-down programs and prototyping for stack performance enhancement.

R&D

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investment is commensurate with the Company’s future expansion into new markets, new product lines, and varied vertical integrations. The average number of R&D employees was 132 at September 30, 2020 compared to 227 at September 30, 2021.

Selling, general and administrative expenses. Selling, general and administrative expenses includes cash and non-cash compensation, benefits, amortization of intangible assets and related costs in support of our general corporate functions, including general management, finance and accounting, human resources, selling and marketing, information technology and legal services.

On April 4, 2017, the Company and Amazon entered into the Amazon Transaction Agreement, pursuant to which the Company agreed to issue to Amazon warrants to acquire up to 55,286,696 shares of common stock, subject to certain vesting events. The first tranche of 5,819,652 warrant shares vested upon the execution of the Amazon Transaction Agreement, and as a result, $7.1 million, the fair value of the first tranche warrant shares, including legal and other fees associated with the negotiation and completion of the agreement was recognized as selling, general and administrative expense on the accompanying unaudited interim consolidated statement of operations for the nine month periods ended September 30, 2017.

Selling, general and administrative expenses for the three months ended September 30, ~~2017,~~2021, increased ~~$0.9~~$25.2 million, or ~~10.4%~~146.5%, to ~~$9.5~~$42.4 million from ~~$8.6~~$17.2 million for the three months ended September 30, ~~2016.~~2020. This increase iswas primarily related to increases in salaries and stock-based compensation due to ~~costs associated with~~ increased headcount and ~~increased insurance costs.~~branding expenses.

Selling, general and administrative expenses for the nine months ended September 30, ~~2017,~~2021, increased ~~$11.1~~$56.7 million, or ~~43.6%~~113.5%, to ~~$36.6~~$106.7 million from ~~$25.5~~$50.0 million for the nine months ended September 30, ~~2016.~~2020. This increase was primarily isrelated to increases in salaries and stock-based compensation due to ~~the aforementioned provision for common stock warrants~~increased headcount and branding expenses, in addition to costs associated with the ~~Amazon Transaction Agreement, costs~~restatement of our previous years’ financial statements.

Contingent Consideration. The fair value of the contingent consideration related to the Giner ELX, Inc. and United Hydrogen Group Inc. acquisitions was remeasured as of September 30, 2021, which resulted in a $8.5 million charge for the three months ended September 30, 2021 and a $8.8 million charge for the nine months ended September 30, 2021, both of which are reflected in the unaudited interim condensed consolidated statement of operations for the three and nine months ended September 30, 2021, respectively, primarily due to an increase in projected revenues associated with ~~increased headcount and increased insurance costs.~~electrolyzers.

Interest, ~~and other expense (income),~~ net. Interest, ~~and other expense,~~ net consists of interest ~~and other expenses~~expense related to ~~interest on~~ our ~~short-term borrowing,~~ long-term debt, convertible senior notes, obligations under ~~capital lease~~finance leases and our finance obligations, as well as interest income. Interest decreased $11.9 million, or (68.9)%, from $17.2 million for the three months ended September 30, 2020 to $5.4 million for the three months ended September 30, 2021. Interest decreased $14.5 million, or (34.2)%, from $42.4 million for the nine months ended September 30, 2020 to $27.9 million for the nine months ended September 30, 2021. This decrease was primarily driven by the exchange and conversion during both 2020 and 2021 of the 7.5% Convertible Senior Note and 5.5% Convertible Senior Notes, and the adoption of ASU 2020-06 which reduced the noncash interest expense on convertible notes.

Other expense, net. Other expense, net consists of other expenses related to our foreign currency exchange ~~gain (loss),~~losses, offset by interest and other income consisting primarily of interest earned on our cash and cash equivalents, ~~note receivable,~~restricted cash and other income. During 2016, the Company entered into a series of capital leases with Generate Lending LLC. In December 2016, the Company entered into a loan and security agreement with NY Green Bank.

~~Net interest and other~~available-for-sale securities. Other expense, net decreased $253 thousand for the three months ended September 30, ~~2017, increased $0.6 million as compared~~2021 in comparison to the three months ended September 30, ~~2016. The increase is attributed to interest on the various financing structures described above, offset by interest~~2020 and ~~other income which remained relatively insignificant for the three months ended September 30, 2017.~~

~~Net interest and other expense~~decreased $134 thousand for the nine months ended September 30, ~~2017, increased $3.3 million as compared~~2021 in comparison to the nine months ended September 30, ~~2016. The increase is attributed~~2020.

Realized loss on investments, net. Realized loss on investments, net consists of the sales and maturities related to ~~interest on~~available-for-sale debt securities. For the ~~various financing structures described above, offset by interest~~three months and ~~other income which remained relatively insignificant for the~~ nine months ended September 30, ~~2017.~~2021, the Company had $254 thousand and $236 thousand, respectively, of net realized loss on investments. The Company did not have an investment portfolio in 2020, and as such there were no realized gains or losses.

Change in fair value of ~~common stock warrant liability.~~ ~~The Company accounts for common stock warrants as common stock warrant liability with~~equity securities. Change in fair value of equity securities consists of the changes in ~~the~~ fair value ~~reflected in~~for equity securities from the ~~consolidated statement~~purchase date to the end of ~~operations as~~the period. For the three months and nine months ended September 30, 2021, the Company had $607 thousand and $284 thousand, respectively, of change in the fair value of ~~common stock warrant liability.~~equity securities. The Company did not have an investment portfolio in 2020, and as such there were no realized gains or losses.

~~The change~~Loss on equity method investments. Loss on equity method investments consists of our interest in ~~fair value of common stock warrant liability for~~Hyvia, which is our 50/50 joint venture with Renault. For both the three months ended September 30, 2017 resulted in an increase in the associated warrant liability of $1.9 million as compared to a decrease of $2.0 million for the three months ended September 30, 2016. These variances are primarily due to changes in the number of warrants outstanding, the average term, the Company’s common stock share price, and ~~changes in volatility of our common stock, which are significant inputs to the Black-Scholes valuation model.~~

~~The change in fair value of common stock warrant liability for the~~ nine months ended September 30, ~~2017 resulted~~2021, the Company recorded a loss of $1.7 million on equity method investments as HyVia had not yet started commercial operations. The Company did not have any equity method investments in ~~an increase in~~2020, and as such there were no realized gains or losses.

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Income Tax

The Company did not record any income tax expense or benefit for the ~~associated warrant liability of $16.5 million as compared to a decrease of $4.7 million for the~~three or nine months ended September 30, ~~2016. These variances are primarily due to changes in~~2021. The Company recognized an income tax benefit for the ~~number~~three and nine months ended September 30, 2020 of ~~warrants outstanding,~~$6.6 million and $24.0 million, respectively. Income tax benefit for the ~~average term,~~three and nine months ended September 30, 2020 included $6.6 million and $19.0, million, respectively, resulting from the ~~Company’s common stock share price, and changes in volatility~~intraperiod tax allocation rules under ASC Topic 740-20, Intraperiod Tax Allocation, under which the Company recognized an income tax benefit resulting from a source of ~~our common stock, which are significant inputs~~future taxable income attributable to the ~~Black-Scholes~~net credit to additional paid-in capital related to the issuance of the 3.75% Convertible Senior Notes, offset by the partial extinguishment of the 5.5% Convertible Senior Notes. In addition, the Company recorded $5.0 million of income tax benefit for the three and nine months ended September 30, 2020 related to the recognition of net deferred tax liabilities in connection with the Giner ELX, Inc. acquisition, which resulted in a corresponding reduction in our deferred tax asset valuation ~~model.~~allowance. The Company has not changed its overall conclusion with respect to the need for a valuation allowance against its net deferred tax assets, which remain fully reserved.

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~~Income taxes.~~The net deferred tax asset generated from ~~our~~the Company’s net operating loss has been offset by a full valuation allowance because it is more likely than not that the tax benefits of the net operating loss carry forward will not be realized. The Company ~~also~~ recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense.

Liquidity and Capital Resources

~~Our~~Liquidity

As of September 30, 2021 and December 31, 2020, the Company had $3.4 billion and $1.3 billion of cash ~~requirements relate primarily~~and cash equivalents and $481.2 million and $321.9 million of restricted cash, respectively. In January and February 2021, the Company issued and sold in a registered equity offering an aggregate of 32.2 million shares of its common stock at a purchase price of $65.00 per share for net proceeds of approximately $2.0 billion. Furthermore, in February 2021, the Company completed the previously announced sale of its common stock in connection with a strategic partnership with SK Holdings to ~~working capital needed~~accelerate the use of hydrogen as an alternative energy source in Asian markets. The Company sold 54,996,188 shares of its common stock to ~~operate and grow our business, including funding operating expenses, growth in inventory to support both shipments~~a subsidiary 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 installationSK Holdings at a purchase price of ~~our customers’ hydrogen infrastructure as well as delivery~~$29.2893 per share, or an aggregate purchase price of ~~the hydrogen fuel,~~approximately $1.6 billion.

The Company has continued development and expansion of our products, payment of lease obligations under sale/leaseback financings, and the repayment or refinancing of our long-term debt. 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 and expanding positive gross margins across all product lines; 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 and to repay or refinance our long-term debt, 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~~stockholders of ~~$110.7~~$267.1 million and $112.1 million for the nine months ended September 30, ~~2017~~2021 and ~~$57.6 million, $55.8 million, and $88.6 million for the years ended December 31, 2016, 2015, and 2014,~~2020, respectively, and ~~has~~had an accumulated deficit of ~~$1.2~~$2.2 billion at September 30, ~~2017.~~2021.

~~During~~The Company’s significant obligations consisted of the nine months ended September 30, 2017, cash used in operating activities was $81.3 million, consisting primarily of a net loss attributable to the Company of $107.6 million and net outflows from fluctuations in working capital and other assets and liabilities of $39.5 million, offset by the impact of noncash charges/gains of $65.8 million. The changes in working capital primarily were related to building of inventory and an increase in accounts receivable offset by, an increase of accounts payable, and increases in deferred revenue. Asfollowing as of September 30, ~~2017, we had~~2021:

(i)

Operating and finance leases totaling $162.7 million and $19.8 million, respectively, of which $23.3 million and $2.8 million, respectively, are due within the next 12 months. These leases are primarily related to sale/leaseback agreements entered into with various financial institutions to facilitate the Company’s commercial transactions with key customers.

(ii)

Finance obligations totaling $207.8 million, of which approximately $35.6 million is due within the next 12 months. Finance obligations consist primarily of debt associated with the sale of future revenues and failed sale/leaseback transactions.

(iii)

Long-term debt, primarily related to the Company’s Loan Agreement with Generate Capital totaling $147.3 million, of which $23.5 million is classified as short term on our consolidated balance sheets. See Note 9, “Long-Term Debt”, for more details.

(iv)

Convertible senior notes totaling $192.3 million at September 30, 2021. See Note 10, “Convertible Senior Notes” for more details.

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The Company’s working capital was $4.5 billion at September 30, 2021, which included unrestricted cash and cash equivalents of ~~$8.0~~$3.4 billion. The Company plans to invest a portion of its available cash to expand its current production and manufacturing capacity and to fund strategic acquisitions and partnerships and capital projects. In the fourth quarter of 2021, the Company expects to invest approximately €5 million, ~~and net working capital~~ of ~~$30.0 million. By comparison, at December 31, 2016, we had cash and cash equivalents~~which €2.5 million will be in the form of ~~$46.0 million and net working capital of $44.4 million.~~

Net cash used in investing activities for the nine months ended September 30, 2017, totaled $28.3 million and included purchases of property, plant and equipment and outflows associated with materials, labor, and overhead necessary to construct new leased property. 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 nine months ended September 30, 2017 totaled $71.2 million and primarily resulted from net proceeds of $20.7 million pursuant to public offerings of common stock, net proceeds from borrowing of long-term debt of $20.6 million, net proceeds of $17.6 million pursuant to exercise of warrants, an increase in finance obligations of $14.7 million and a ~~decrease in restricted cash, offset by redemption of Series D preferred stock and principal payments of long-term debt.~~

~~In connection with the consummation~~shareholder loan. Future use of the ~~Walmart Transaction Agreement described below,~~Company’s funds is discretionary and the Company entered into a master lease agreement (the “Wells Fargo MLA”) with Wells Fargo to facilitate the Company’s commercial transactions with Walmart. Pursuant to the Wells Fargo MLA, the Company sells fuel cell systems and hydrogen infrastructure to Wells Fargo and then leases them back and operates them at Walmart sites. Also, in connection with the consummation of the Amended Loan Agreement, the Company entered into an amended and restated master lease agreement (the “Generate Capital MLA”) with Generate Capital to facilitate the aforementioned

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~~Company’s commercial transactions with Walmart. During July 2017, proceeds from transactions under this program, which are accounted for as capital leases, were $17.7 million.~~

The combination of (i) the Amazon Transaction Agreement, as described below under Amazon.com, Inc., Transaction Agreement; (ii) the Walmart Transaction Agreement, as described below under Wal-Mart Stores, Inc. Transaction Agreement; (iii)the Amended Loan Agreement, as described below under NY Green Bank Loan; (iv) the Wells Fargo MLA and (v) the Generate Capital MLA significantly improves the Company’s liquidity and ability to manage working capital.

Public and Private Offerings of Equity and Debt

Common Stock Issuances

In February 2021, the Company completed the previously announced sale of its common stock in connection with a strategic partnership with SK Holdings to accelerate the use of hydrogen as an alternative energy source in Asian markets. The Company sold 54,966,188 shares of its common stock to a subsidiary of SK Holdings at a purchase price of $29.2893 per share, or an aggregate purchase price of approximately $1.6 billion.

In January and February 2021, the Company issued and sold in a registered equity offering an aggregate of 32.2 million shares of its common stock at a purchase price of $65.00 per share for net proceeds of approximately $2.0 billion.

In November 2020, the Company issued and sold in a registered equity offering an aggregate of 43,700,000 shares of its common stock at a purchase price of $22.25 per share for net proceeds of approximately $927.3 million.

In August 2020, the Company issued and sold in a registered equity offering an aggregate of 35,276,250 shares of its common stock at a purchase price of $10.25 per share for net proceeds of approximately $344.4 million.

On April 13, 2020, the Company entered into the At Market Issuance Sales Agreement with B. Riley Financial (“B. Riley”), as sales agent, pursuant to which the Company may offer and sell, from time to time through B. Riley, shares of Company common stock having an aggregate offering price of up to $75.0 million. As of the date of this filing, the Company has not issued any shares of common stock pursuant to the At Market Issuance Sales Agreement.

Convertible Senior Notes

In May 2020, the Company issued $212.5 million in aggregate principal amount of 3.75% Convertible Senior Notes. The total net proceeds from this offering, after deducting costs of the issuance, were $205.1 million. The Company used $90.2 million of the net proceeds from the offering of the 3.75% Convertible Senior Notes to repurchase $66.3 million of the $100 million in aggregate principal amount of the 5.5% Convertible Senior Notes. In addition, the Company used approximately $16.3 million of the net proceeds from the offering of the 3.75% Convertible Senior Notes to enter into privately negotiated capped called transactions.In the fourth quarter of 2020, $33.5 million of the remaining 5.5% Convertible Senior Notes were converted into 14.6 million shares of common stock, resulting in a gain of approximately $4.5 million which was recorded on the consolidated statement of operations on the gain (loss) on extinguishment of debt line. As of December 31, 2020, approximately $160 thousand aggregate principal amount of the 5.5% Convertible Senior Notes remained outstanding, all of which were converted to common stock in January 2021.

In September 2019, the Company issued $40.0 million in aggregate principal amount of 7.5% Convertible Senior Note. The Company’s total obligation, net of interest accretion, due to the holder was $48.0 million. The total net proceeds from this offering, after deducting costs of the issuance, were $39.1 million. On July 1, 2020, the note automatically converted fully into 16.0 million shares of common stock.

Secured Debt

In March 2019, the Company entered into a loan and security agreement, as amended (the “Loan Agreement”), with Generate Lending, LLC (“Generate Capital”), providing for a secured term loan facility in the amount of $100 million (the “Term Loan Facility”).

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During the year ended December 31, 2020, the Company, under another series of amendments to the Loan Agreement, borrowed an incremental $100.0 million. As part of the amendment to the Loan Agreement, the Company’s interest rate on the secured term loan facility was reduced to 9.50% from 12.00% per annum, and the maturity date was extended to October 31, 2025 from October 6, 2022. On September 30, 2021, the outstanding balance under the Term Loan Facility was $137.7 million. In addition to the Term Loan Facility, on September 30, 2021 there was approximately $9.5 million of debt outstanding related to the United Hydrogen Group, Inc. acquisition.

The Loan Agreement includes covenants, limitations, and events of default customary for similar facilities. Interest and a portion of the principal amount is ~~no guarantee that future funding~~payable on a quarterly basis. Principal payments are funded in part by releases of restricted cash, as described in Note 19, “Commitments and Contingencies.” Based on the amortization schedule as of September 30, 2021, the aforementioned loan balance under the Term Loan Facility will be ~~available~~fully paid by October 31, 2025. The Company is in compliance with, or has obtained waivers for, all debt covenants.

The Term Loan Facility is secured by substantially all of the Company’s and the guarantor subsidiaries’ assets, including, among other assets, all intellectual property, all securities in domestic subsidiaries and 65% of the securities in foreign subsidiaries, subject to certain exceptions and exclusions.

The Loan Agreement provides that if ~~and when required or at terms acceptable~~there is an event of default due to the ~~Company. 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.~~Company’s insolvency or if the Company fails to perform in any material respect the servicing requirements for fuel cell systems under certain customer agreements, which failure would entitle the customer to terminate such customer agreement, replace the Company or withhold the payment of any material amount to the Company under such customer agreement, then Generate Capital has the right to cause Proton Services Inc., a wholly owned subsidiary of the Company, to replace the Company in performing the maintenance services under such customer agreement.

As of September 30, 2021, the Term Loan Facility requires the principal balance as of each of the following dates not to exceed the following (in thousands):


December 31, 2021	$	127,317
December 31, 2022		93,321
December 31, 2023		62,920
December 31, 2024		33,692
December 31, 2025		—

Several key indicators of liquidity are summarized in the following table (in thousands):


	Nine months		Year
	ended or at		ended or at
	September 30, 2017		December 31, 2016

					Nine months		Year
					ended or at		ended or at
					September 30, 2021		December 31, 2020
Cash and cash equivalents at end of period	$	7,957	$	46,014	$	3,371,962	$	1,312,404
Restricted cash at end of period		48,570		54,622		481,230		321,880
Working capital at end of period		30,025		44,448		4,518,052		1,380,830
Net loss attributable to common shareholders		110,727		57,591
Net loss attributable to common stockholders						(267,051)		(596,181)
Net cash used in operating activities		81,294		29,636		(348,501)		(155,476)
Purchases of property, plant and equipment and leased property		28,291		58,075
Net cash used in investing activities						(1,014,294)		(95,334)
Net cash provided by financing activities		71,242		69,885		3,581,762		1,515,529

3.75% Convertible Senior Notes

~~Amazon.com, Inc.~~

On May 18, 2020, the Company issued $200.0 million in aggregate principal amount of 3.75% Convertible Senior Notes due June 1, 2025, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. On May 29, 2020, the Company issued an additional $12.5 million in aggregate principal amount of 3.75% Convertible Senior Notes.

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At issuance in May 2020, the total net proceeds from the 3.75% Convertible Senior Notes were as follows:


	Amount
	(in thousands)
Principal amount	$	212,463
Less initial purchasers' discount		(6,374)
Less cost of related capped calls		(16,253)
Less other issuance costs		(617)
Net proceeds	$	189,219

The 3.75% Convertible Senior Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020. The notes will mature on June 1, 2025, unless earlier converted, redeemed or repurchased in accordance with their terms.

The 3.75% Convertible Senior Notes are senior, unsecured obligations of the Company and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the notes, equal in right of payment to any of the Company’s existing and future liabilities that are not so subordinated, including the Company’s $100 million in aggregate principal amount of the 5.5% Convertible Senior Notes, effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities, including trade payables, of its current or future subsidiaries.

Holders of the 3.75% Convertible Senior Notes may convert their notes at their option at any time prior to the close of the business day immediately preceding December 1, 2024 in the following circumstances:

during any calendar quarter commencing after March 31, 2021 if the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

during the five business days after any five consecutive trading day period (such five consecutive trading day period, the measurement period) in which the trading price per $1,000 principal amount of the 3.75% Convertible Senior Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

if the Company calls any or all of the 3.75% Convertible Senior Notes for redemption, any such notes that have been called for redemption may be converted at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

upon the occurrence of specified corporate events, as described in the indenture governing the 3.75% Convertible Senior Notes.

On or after December 1, 2024, the holders of the 3.75% Convertible Senior Notes may convert all or any portion of their notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions.

The initial conversion rate for the 3.75% Convertible Senior Notes is 198.6196 shares of the Company’s common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $5.03 per share of the Company’s common stock, subject to adjustment upon the occurrence of specified events. Upon conversion, the Company will pay or deliver, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. During the three months ended September 30,

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2021, certain conditions allowing holders of the 3.75% Convertible Senior Notes to convert were met. The 3.75% Convertible Senior Notes are therefore convertible during the calendar quarter ending September 30, 2021 at the conversion rate discussed above. During the nine months ended September 30, 2021, $15.2 million of the 3.75% Convertible Senior Notes were converted and the Company issued approximately 3.0 million shares of common stock in conjunction with these conversions.

In addition, following certain corporate events or following issuance of a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or convert its notes called for redemption during the related redemption period in certain circumstances.

The 3.75% Convertible Senior Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after June 5, 2023 and before the 41^st scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the three trading days immediately preceding the date the Company sends the related redemption notice, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company sends such redemption notice.

If the Company undergoes a “fundamental change” (as defined in the Indenture), holders may require the Company to repurchase their notes for cash all or any portion of their notes at a fundamental change repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the fundamental change repurchase date.

The Company accounts for the 3.75% Convertible Senior Notes as a liability. We incurred transaction costs related to the issuance of the 3.75% Convertible Senior Notes of approximately $7.0 million, consisting of initial purchasers’ discount of approximately $6.4 million and other issuance costs of $0.6 million which were recorded as debt issuance cost (presented as contra debt in the unaudited interim condensed consolidated balance sheets) and are being amortized to interest expense over the term of the 3.75% Convertible Senior Notes.

The 3.75% Convertible Senior Notes consisted of the following (in thousands):


	September 30,
	2021
Principal amounts:
Principal	$	197,278
Unamortized debt issuance costs (1)		(4,958)
Net carrying amount	$	192,320

Included in the unaudited interim condensed consolidated balance sheets within the 3.75% Convertible Senior Notes, net and amortized over the remaining life of the notes using the effective interest rate method.

The following table summarizes the total interest expense, the amortization of debt issuance costs and the effective interest rate related to the 3.75% Convertible Senior Notes (in thousands, except for effective interest rate):


	September 30,
	2021
Interest expense	$	1,849
Amortization of debt issuance costs		306
Total		2,155

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Effective interest rate		4.50%

Based on the closing price of the Company’s common stock of $25.54 on September 30, 2021, the if-converted value of the notes was greater than the principal amount. The estimated fair value of the note at September 30, 2021 was approximately $1.0 billion. The fair value estimation was primarily based on an active stock exchange trade on September 30, 2021 of the 3.75% Convertible Senior Notes. See Note 15, “Fair Value Measurements,” for a description of the fair value hierarchy.

Capped Call

In conjunction with the pricing of the 3.75% Convertible Senior Notes, the Company entered into privately negotiated capped call transactions (the “3.75% Notes Capped Call”) with certain counterparties at a price of $16.2 million. The 3.75% Notes Capped Call covers, subject to anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that underlie the initial 3.75% Convertible Senior Notes and is generally expected to reduce potential dilution to the Company’s common stock upon any conversion of the 3.75% Convertible Senior Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the 3.75% Notes Capped Call is initially $6.7560 per share, which represents a premium of approximately 60%over the last then-reported sale price of the Company’s common stock of $4.11 per share on the date of the transaction and is subject to certain adjustments under the terms of the 3.75% Notes Capped Call. The 3.75% Notes Capped Call becomes exercisable if the conversion option is exercised.

The net cost incurred in connection with the 3.75% Notes Capped Call were recorded as a reduction to additional paid-in capital in the unaudited interim condensed consolidated balance sheets.

5.5% Convertible Senior Notes

In March 2018, the Company issued $100.0 million in aggregate principal amount of the 5.5% Convertible Senior Notes due on March 15, 2023, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

In May 2020, the Company used a portion of the net proceeds from the issuance of the 3.75% Convertible Senior Notes to finance the cash portion of the partial repurchase of the 5.5% Convertible Senior Notes, which consisted of a repurchase of approximately $66.3 million in aggregate principal amount of the 5.5% Convertible Senior Notes in privately-negotiated transactions for aggregate consideration of $128.9 million, consisting of approximately $90.2 million in cash and approximately 9.4 million shares of the Company’s common stock. The partial repurchase of the 5.5% Convertible Senior Notes resulted in a $13.2 million gain on early debt extinguishment. In the fourth quarter of 2020, $33.5 million of the remaining 5.5% Convertible Senior Notes were converted into 14.6 million shares of common stock which resulted in a gain of approximately $4.5 million which was recorded on the consolidated statement of operations on the gain (loss) on extinguishment of debt line.

On January 7, 2021, the remaining aggregate principal of $160 thousand aggregate principal amount of the 5.5% Convertible Senior Notes were converted into 69,808 shares of common stock. Interest expense and amortization for the period were immaterial.

Capped Call

In conjunction with the pricing of the 5.5% Convertible Senior Notes, the Company entered into privately negotiated capped call transactions (the “5.5% Notes Capped Call”) with certain counterparties at a price of $16.0 million to reduce the potential dilution to the Company’s common stock upon any conversion of the 5.5% Convertible Senior Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 5.5% Convertible Senior Notes, as the case may be. The net cost incurred in connection with the 5.5% Notes Capped Call has been recorded as a reduction to additional paid-in capital in the unaudited interim condensed consolidated balance sheets.

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In conjunction with the pricing of the partial repurchase of the 5.5% Convertible Senior Notes, the Company terminated 100% of the 5.5% Notes Capped Call on June 5, 2020. As a result of the termination, the Company received $24.2 million, which was recorded in additional paid-in capital in the unaudited interim condensed consolidated balance sheets.

Common Stock Forward

In connection with the issuance of the 5.5% Convertible Senior Notes, the Company also entered into a forward stock purchase transaction (the “Common Stock Forward”), pursuant to which the Company agreed to purchase 14,397,906 shares of its common stock for settlement on or about March 15, 2023. In connection with the issuance of the 3.75% Convertible Senior Notes and the partial repurchase of the 5.5% Convertible Senior Notes, the Company amended and extended the maturity of the Common Stock Forward to June 1, 2025. The number of shares of common stock that the Company will ultimately repurchase under the Common Stock Forward is subject to customary anti-dilution adjustments. The Common Stock Forward is subject to early settlement or settlement with alternative consideration in the event of certain corporate transactions.

The net cost incurred in connection with the Common Stock Forward of $27.5 million was recorded as an increase in treasury stock in the unaudited interim condensed consolidated balance sheets. The related shares were accounted for as a repurchase of common stock.

The book value of the 5.5% Notes Capped Call and Common Stock Forward are not remeasured.

During the fourth quarter of 2020, the Common Stock Forward was partially settled and, as a result, the Company received 4.4 million shares of its common stock. During the three 0 shares were settled and received by the Company. During the nine months ended September 30, 2021, 8.1 million shares were settled and received by the Company.

Amazon Transaction Agreement

On April 4, 2017, the Company and ~~Amazon.com, Inc. (“Amazon”)~~Amazon entered into a Transaction Agreement (the “Amazon Transaction Agreement”), pursuant to which the Company agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly owned subsidiary of Amazon, ~~warrants~~a warrant (the “Amazon Warrant”) to acquire up to 55,286,696 shares of the Company’s common stock (the “Amazon Warrant Shares”), subject to certain vesting events described below. The Company and Amazon entered into the Amazon Transaction Agreement in connection with existing commercial agreements between the Company and Amazon with respect to the deployment of the Company’s GenKey fuel cell technology at Amazon distribution centers. The existing commercial agreements contemplate, but do not guarantee, future purchase orders for the Company’s fuel cell technology. ~~Additionally, Amazon and Plug Power will begin working together on technology collaboration, exploring the expansion of applications for Plug Power’s line of ProGen fuel cell engines.~~ The vesting of the Amazon Warrant Shares ~~is linked to~~was conditioned upon payments made by Amazon or its affiliates (directly or indirectly through third parties) pursuant to the existing commercial agreements.

~~Table~~Under the terms of ~~Contents~~

~~The majority~~the original Amazon Warrant, the first tranche of the 5,819,652 Amazon Warrant Shares vested upon execution of the Amazon Warrant, and the remaining Amazon Warrant Shares ~~will~~ vest based on Amazon’s payment of up to $600.0 million to the Company in connection with Amazon’s purchase of goods and services from the Company. The ~~first tranche of 5,819,652 Amazon Warrant Shares vested upon the execution of the Amazon Transaction Agreement. Accordingly,~~ $6.7 million ~~the~~ fair value of the first tranche of the Amazon Warrant Shares was recognized as selling, general and administrative expense onupon execution of the ~~accompanying unaudited interim consolidated statement of operations~~Amazon Warrant.

Provision for the ~~nine months ended September 30, 2017.~~second and third tranches of Amazon Warrant Shares is recorded as a reduction of revenue because they represent consideration payable to a customer.

The fair value of the second tranche of Amazon Warrant Shares was measured at January 1, 2019, upon adoption of ASU 2019-08. The second tranche of 29,098,260 Amazon Warrant Shares ~~will vest~~vested in four equal installments, ~~of 7,274,565 Amazon Warrant Shares each time~~as Amazon or its affiliates, directly or indirectly through third parties, ~~make~~made an aggregate of $50.0 million in payments for goods and services to the Company, up to payments totaling $200.0 million in the aggregate. The ~~exercise price for~~last installment of the ~~first~~second tranche vested on November 2, 2020. Revenue reductions of $9.0 million, $4.1 million and $9.8 million associated with

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the second ~~tranches~~tranche of Amazon Warrant Shares ~~will be $1.1893 per share. After~~were recorded in 2020, 2019 and 2018, respectively, under the terms of the original Amazon ~~has made payments to~~Warrant.

Under the ~~Company totaling $200.0 million,~~terms of the original Amazon Warrant, the third tranche of 20,368,784 Amazon Warrant Shares ~~will vest~~vests in eight equal installments, ~~of 2,546,098 Amazon Warrant Shares each time~~as Amazon or its affiliates, directly or indirectly through third parties, ~~make~~made an aggregate of $50.0 million in payments for goods and services to the Company, up to payments totaling $400.0 million in the aggregate. The measurement date for the third tranche of Amazon Warrant Shares was November 2, 2020, when their exercise price was determined, as discussed further below. The fair value of the third tranche of Amazon Warrant Shares was determined to be $10.57 each. During 2020, revenue reductions of $24.1 million associated with the third tranche Amazon Warrant Shares were recorded under the terms of the original Amazon Warrant, prior to the December 31, 2020 waiver described below.

On December 31, 2020, the Company waived the remaining vesting conditions under the Amazon Warrant, which resulted in the immediate vesting of all the third tranche of the Amazon Warrant Shares and recognition of an additional $399.7 million reduction to revenue.

The $399.7 million reduction to revenue resulting from the December 31, 2020 waiver was determined based upon a probability assessment of whether the underlying shares would have vested under the terms of the original Amazon Warrant. Based upon the Company’s projections of probable future cash collections from Amazon (i.e., a Type I share based payment modification), a reduction of revenue associated with 5,354,905 Amazon Warrant Shares was recognized at their previously measured November 2, 2020 fair value of $10.57 per warrant. A reduction of revenue associated with the remaining 12,730,490 Amazon Warrant Shares was recognized at their December 31, 2020 fair value of $26.95 each, based upon the Company’s assessment that associated future cash collections from Amazon were not deemed probable (i.e., a Type III share based payment modification).

The $399.7 million reduction to revenue was recognized during the year ended December 31, 2020 because the Company 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. Additionally, for the year ended December 31, 2020, the Company recorded a reduction to the provision for warrants of $12.8 million in connection with the release of the service loss accrual.

At December 31, 2020, all 55,286,696 of the Amazon Warrant Shares had vested. For service contracts entered into prior to December 31, 2020, the warrant charge associated with that revenue was capitalized and is subsequently amortized over the life of the service contract. The total amount of provision for common stock warrants recorded as a reduction of revenue for the Amazon Warrant during the three months ended September 30, 2021 and 2020 was $106thousand and $17.3 million, respectively. The amount of provision for common stock warrants recorded as a reduction of revenue for the Amazon Warrant during the nine months ended September 30, 2021 and 2020 was $315 thousand and $22.0 million, respectively. During the three and nine months ended September 30, 2021, the Amazon Warrant was exercised with respect to 3,501,640 and 17,461,994 shares of common stock, respectively.

The exercise price for the first and second tranches of Amazon Warrant Shares was $1.1893 per share. The exercise price of the third tranche of Amazon Warrant Shares ~~will be~~was $13.81 per share, which was determined pursuant to the terms of the Amazon Warrant as an amount ~~per share~~ equal to ninety percent (90%) of the 30-day volume weighted average share price of the Company’s common stock as of November 2, 2020, the ~~first~~final vesting date of the second tranche of Amazon Warrant Shares. The Amazon Warrant ~~Shares are~~is exercisable through April 4, 2027.

The Amazon Warrant ~~Shares provide~~provides for net share settlement that, if elected by the ~~holders,~~holder, will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price. The Amazon Warrant ~~Shares provide~~provides for certain adjustments that may be made to the exercise price and the number of shares of common stock issuable upon exercise due to customary anti-dilution provisions based on future events. ~~Vested warrants are~~The Amazon Warrant is classified as an equity ~~instruments.~~instrument.

Because the Amazon Warrant Shares contain performance criteria (i.e. aggregate purchase levels), which Amazon must achieve for the Amazon Warrant Shares to vest, as detailed above, the final measurement date for the Amazon Warrant Shares is the date on which the Amazon Warrant Shares vest. Prior to the final measurement, when achievement of the performance criteria has been deemed probable, the estimated fair value of Amazon Warrant Shares is being recorded as a reduction to revenue and an addition to additional paid-in capital based on the projected number of Amazon Warrant Shares expected to vest, the proportion of purchases by Amazon and its affiliates within the period relative to the aggregate purchase levels required for the Amazon Warrant Shares to vest and the then-current fair value of the related Amazon Warrant Shares. To the extent that projections change in the future as to the number of Amazon Warrant Shares that will vest, as well as changes in the fairFair value of the Amazon Warrant ~~Shares, a cumulative catch-up adjustment will be recorded~~at December 31, 2020 and November 2, 2020 was based on the Black Scholes Option Pricing Model, which is based, in part, upon level 3 unobservable inputs for which there is little or no market data, requiring the ~~period in which~~Company to develop its own assumptions.

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The Company used the ~~estimates change.~~following assumptions for its Amazon Warrant:



	December 31, 2020	November 2, 2020
Risk-free interest rate	0.58%	0.58%
Volatility	75.00%	75.00%
Expected average term	6.26	6.42
Exercise price	$13.81	$13.81
Stock price	$33.91	$15.47

At September 30, 2017, 5,819,652 of the Amazon Warrant Shares have vested. The amount of selling, general and administrative expense attributed to this first tranche recorded in April 2017 was $7.1 million, including legal and other fees associated with the negotiation and completion of the agreement. The amount of provision for common stock warrants recorded as a reduction of revenue during the three and nine months ended September 30, 2017 was $14.2 million and $16.1 million, respectively.

~~Wal-Mart Stores Inc.,~~Walmart Transaction Agreement

On July 20, 2017, the Company and ~~Wal-Mart Stores, Inc. (“Walmart”)~~Walmart entered into a Transaction Agreement (the “Walmart Transaction Agreement”), pursuant to which the Company agreed to issue to Walmart a warrant (the “Walmart Warrant”) to acquire up to 55,286,696 shares of the Company’s common stock, subject to certain vesting events (the “Walmart Warrant Shares”). The Company and Walmart entered into the Walmart Transaction Agreement in connection with existing commercial agreements between the Company and Walmart with respect to the deployment of the Company’s GenKey fuel cell technology across various Walmart distribution centers. The existing commercial agreements contemplate, but do not guarantee, future purchase orders for the Company’s fuel cell technology. The vesting of the warrant shares ~~is linked to~~conditioned upon payments made by Walmart or its affiliates (directly or indirectly through third parties) pursuant to transactions entered into after January 1, 2017 under existing commercial agreements.

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The majority of the Walmart Warrant Shares will vest based on Walmart’s payment of up to $600.0 million to the Company in connection with Walmart’s purchase of goods and services from the Company. The first tranche of 5,819,652 Walmart Warrant Shares vested upon the execution of the Walmart ~~Transaction Agreement.~~Warrant and was fully exercised as of December 31, 2020. Accordingly, $10.9 million, the fair value of the first tranche of Walmart Warrant Shares, was recorded as a provision for common stock warrants and presented as a reduction to revenue on the ~~accompanying unaudited interim~~ consolidated ~~statement~~statements of operations during 2017. All future provision for ~~the three~~common stock warrants is measured based on their grant-date fair value and ~~nine month periods ended September 30, 2017.~~recorded as a charge against revenue. The second tranche of 29,098,260 Walmart Warrant Shares ~~will vest~~vests in four installments of 7,274,565 Walmart Warrant Shares each time Walmart or its affiliates, directly or indirectly through third parties, make an aggregate of $50.0 million in payments for goods and services to the Company, up to payments totaling $200.0 million in the aggregate. The exercise price for the first and second tranches of Walmart Warrant Shares ~~will be~~is $2.1231 per share. After Walmart has made payments to the Company totaling $200.0 million, the third tranche of 20,368,784 Walmart Warrant Shares will vest in eight installments of 2,546,098 Walmart Warrant Shares each time Walmart or its affiliates, directly or indirectly through third parties, make an aggregate of $50.0 million in payments for goods and services to the Company, up to payments totaling $400.0 million in the aggregate. The exercise price of the third tranche of Walmart Warrant Shares will be an amount per share equal to ninety percent (90%) of the 30-day volume weighted average share price of the common stock as of the ~~first~~final vesting date of the second tranche of Walmart Warrant Shares, provided that, with limited exceptions, the exercise price for the third tranche will be no lower than $1.1893. The Walmart Warrant ~~Shares are~~is exercisable through July 20, 2027.

The Walmart Warrant ~~Shares provide~~provides for net share settlement that, if elected by the ~~holders,~~holder, will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price. The Walmart Warrant ~~Shares provide~~provides for certain adjustments that may be made to the exercise price and the number of shares of common stock issuable upon exercise due to customary anti-dilution provisions based on future events. ~~Vested warrants are~~The Walmart Warrant is classified as an equity ~~instruments.~~instrument.

Because the Walmart Warrant Shares contain performance criteria (i.e. aggregate purchase levels), which Walmart must achieve for the Walmart Warrant Shares to vest, as detailed above, the final measurement date for the Walmart Warrant Shares is the date on which the Walmart Warrant Shares vest. Prior to the final measurement, when achievement of the performance criteria has been deemed probable, the estimated fair value of Walmart Warrant Shares is being recorded as a reduction to revenueAt both September 30, 2021 and an addition to additional paid-in capital based on the projected number of Walmart Warrant Shares expected to vest, the proportion of purchases by Walmart and its affiliates within the period relative to the aggregate purchase levels required for the Walmart Warrant Shares to vest and the then-current fair value of the related Walmart Warrant Shares. To the extent that projections change in the future as to the number of Walmart Warrant Shares that will vest, as well as changes in the fair valueDecember 31, 2020, 13,094,217 of the Walmart Warrant Shares had vested. The total amount of provision for common stock warrants recorded as a ~~cumulative catch-up adjustment will be recorded in the period in which the estimates change.~~

~~At September 30, 2017, 5,819,652~~reduction of revenue for the Walmart Warrant ~~Shares have vested.~~during the three months ended September 30, 2021 and 2020 was $1.2 million and $1.3 million, respectively. The amount of provision for common stock warrants recorded as a reduction toof revenue ~~during the three and nine months ended September 30, 2017 was $11.8 million.~~

~~NY Green Bank Loan~~

On December 23, 2016, the Company, and its subsidiaries Emerging Power Inc. and Emergent Power Inc. entered into a loan and security agreement with NY Green Bank, a Division of the New York State Energy Research & Development Authority (NY Green Bank), pursuant to which NY Green Bank made available to the Company a secured term loan facility in the amount of $25.0 million (Term Loan Facility), subject to certain terms and conditions. The Company borrowed $25.0 million upon closing and incurred closing costs of $1.2 million. On July 21, 2017, the Company and NY Green Bank entered into an amendment to the Term Loan Facility (Amended Loan Agreement), which among other things, provided for an additional $20.0 million term loan, increasing the size of the total commitment to $45.0 million, amended the interest rate, prepayment penalty and product deployment and employment targets. The maturity date of the Amended Loan Agreement will remain at December 23, 2019. As with the existing facility, the up-sized facility will be repaid primarily as the Company’s various restricted cash reserves are released over the term of the facility. During the three months ended September 2017, the Company borrowed the additional $20.0 million of working capital financing and incurred closing costs of $0.5 million. At September 30, 2017, the outstanding principal balance under the Term Loan Facility was $40.8 million. The fair value of the Term Loan Facility approximates the carrying value as of September 30, 2017.

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~~Advances under the Term Loan Facility bear interest at a rate equal to the sum of (i) the LIBOR rate~~ for the applicable interest period, plus applicable margin. The interest rate at September 30, 2017 was approximately 10.8%. The term of the loan is three years, with a maturity date of December 23, 2019. As of September 30, 2017, estimated remaining principal payments will approximately be $8.0 million, $19.1 million, and $13.7 millionWalmart Warrant during ~~the years ended December 31, 2017, 2018, and 2019, respectively. These payments will be funded by restricted cash released, as described in Note 14, Commitments and Contingencies.~~

Interest and a varying portion of the principal amount is payable on a quarterly basis and the entire then outstanding principal balance of the Term Loan Facility, together with all accrued and unpaid interest, is due and payable on the maturity date. On the maturity date, the Company may also be required to pay additional fees of up to $1.8 million if the Company is unable to meet certain goals related to the deployment of fuel cell systems in the State of New York and increasing the Company’s number of full-time employees in the State of New York. The Company is currently on track to meet those goals.

~~Redeemable Convertible Preferred Stock~~

In December 2016, the Company completed an offering of an aggregate of 18,500 shares of the Company’s Series D Redeemable Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”) to purchase 7,381,500 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), resulting in aggregate proceeds of approximately $15.6 million. During the nine months ended September 30, ~~2017,~~2021 and 2020 was $4.4 million and $3.2 million, respectively. During the ~~Company redeemed 3,700 shares~~three months ended March

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31, 2021, the Series D Preferred Stock, at an aggregate redemption price of approximately $3.7 million. On April 5, 2017, all of the remaining outstanding shares of the Series D Preferred Stock were converted into an aggregate of 9,548,393Walmart Warrant had been exercised with respect to 7,274,565 shares of common ~~stock at a conversion price~~stock. There were no exercises during the second or third quarter of ~~$1.55. The conversion was done at the election of the holder in accordance with the terms of the offering. No shares of Series D Preferred Stock remain outstanding.~~2021.

On January 26, 2017, Air Liquide sold an aggregate of 2,620 shares of the Company’s Series C Redeemable Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”) to FiveT Capital Holding AGOperating and FiveMore Special Situations Fund Limited. Following the sale, Air Liquide owned 2,611 shares of Series C Preferred Stock, Five T Capital Holding AG owns 1,750 shares of Series C Preferred Stock and FiveMore Special Situations Fund Limited owns 870 shares of Series C Preferred Stock. On August 28, 2017, Air Liquide acquired 2,772,518 shares of Common Stock by converting all 2,611 shares of Series C Preferred Stock at the conversion price of $0.2343. Following the conversion, Five T Capital Holding AG and FiveMore Special Situations Fund Limited continue to own 1,750 and 870 shares of Series C Preferred Stock, respectively.Finance Lease Liabilities

~~Operating Leases~~

As of September 30, ~~2017,~~2021, the Company ~~has several non-cancelable~~had operating leases, ~~(as lessor and~~ as ~~lessee),~~lessee, primarily associated with sale/leaseback transactions that are partially secured by restricted cash, security deposits and pledged escrows (see also Note 1, “Nature of Operations”) as summarized below. These leases expire over the next ~~six~~one to nine years. Minimum rent payments under operating leases are recognized on a ~~straight‑line~~straight-line basis over the term of the lease.

As Lessor

As Lessee
Remainder of 2017

$
5,585

$
3,271
2018

22,339

12,920
2019

22,143

11,789
2020

20,987

10,633
2021

16,751

6,346
Thereafter

8,639

1,962
Total future minimum lease payments

$
96,444

$
46,921


			Finance		Total
		Operating Lease	Lease		Lease
		Liability	Liability		Liabilities
Remainder of 2021	$	9,929	$	1,019	$	10,948
2022		39,932		4,012		43,944
2023		39,989		3,989		43,978
2024		39,957		3,996		43,953
2025 and thereafter		90,241		10,843		101,084
Total future minimum payments		220,048		23,859		243,907
Less imputed interest		(57,364)		(4,074)		(61,438)
Total	$	162,684	$	19,785	$	182,469

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~~Finance Obligations~~

~~During~~Rental expense for all operating leases was $9.6 million and $8.1 million for the three months ended September 30, 2021 and 2020, respectively. Rental expense for all operating leases was $25.8 million and $20.6 million for the nine months ended September 30, ~~2017, the Company entered into a sale/leaseback transaction, which was accounted for as a capital lease~~2021 and ~~reported as part of finance obligations~~2020, respectively.

The gross profit on ~~the Company’s unaudited interim consolidated balance sheet. The outstanding balance of finance obligations related to~~ sale/leaseback transactions for all operating leases was $30.7 million and $25.2 million for the three months ended September 30, 2021 and 2020, respectively. The gross profit on sale/leaseback transactions for all operating leases was $66.1 million and $44.9 million for the nine months ended September 30, 2021 and 2020, respectively.

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At September 30, 2021 and December 31, 2020, the right of use assets associated with operating leases was $200.2 million and $136.9 million, respectively. The accumulated depreciation for these right of use assets was $32.3 million and $19.9 million at September 30, ~~2017~~2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, the right of use assets associated with finance leases was ~~$45.9 million.~~$22.8 million and $5.7 million, respectively. The ~~fair value~~accumulated depreciation for these right of use assets was $757 thousand and $102 thousand at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, security deposits associated with sale/leaseback transactions were $3.3 million and $5.8 million, respectively, and were included in other assets in the consolidated balance sheets

Other information related to the operating leases are presented in the following table:


	Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020
Cash payments (in thousands)	$	25,726	$	14,954
Weighted average remaining lease term (years)		5.72		4.55
Weighted average discount rate		11.2%		11.8%

Right of use assets obtained in exchange for new finance lease liabilities were $5.8 million and $0 for the three months ended September 30, 2021 and 2020, respectively. Right of use assets obtained in exchange for new finance lease liabilities were $17.9 million and $686 thousand for the nine months ended September 30, 2021 and 2020, respectively.

Other information related to the finance ~~obligation approximates~~leases are presented in the ~~carrying value as of September 30, 2017.~~following table:


	Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020
Cash payments (in thousands)	$	2,128	$	252
Weighted average remaining lease term (years)		4.57		6.51
Weighted average discount rate		6.9%		9.6%

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Future minimum payments under finance obligations notes above as of September 30, 2021 were as follows (in thousands)


					Total
		Sale of Future		Sale/leaseback	Finance
		revenue - debt		financings	Obligations
Remainder of 2021	$	12,788	$	1,680	$	14,468
2022		50,632		4,975		55,607
2023		50,632		3,148		53,780
2024		50,632		16,154		66,786
2025 and thereafter		86,614		—		86,614
Total future minimum payments		251,298		25,957		277,255
Less imputed interest		(60,760)		(8,658)		(69,418)
Total	$	190,538	$	17,299	$	207,837

Other information related to the above finance obligations are presented in the following table:


		Nine months ended		Nine months ended
		September 30, 2021		September 30, 2020
Cash payments (in thousands)	$	41,325	$	31,693
Weighted average remaining term (years)		4.88		4.74
Weighted average discount rate		11.3%		11.3%

Restricted Cash

~~The Company has entered into~~In connection with certain of the above noted sale/leaseback agreements, ~~associated with its products and services. In connection with these agreements,~~ cash of ~~$47.6~~$301.3 million iswas required to be restricted as security ~~and~~as of September 30, 2021, which restricted cash will be released over the lease term. ~~The~~As of September 30, 2021, the Company ~~has additional~~also had certain letters of credit backed by restricted cash totaling $137.7 million that are security ~~deposits as disclosed in~~for the ~~Operating Leases section above.~~above noted sale/leaseback agreements.

Fair Value

The Company ~~also has letters~~records the fair value of ~~credit~~assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the ~~aggregate amount~~principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of ~~$1.0 million associated with~~the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

These levels are:

●

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

●

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

●

Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

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The fair values of the Company’s investments are based upon prices provided by an ~~agreement to provide hydrogen infrastructure~~independent pricing service. Management has assessed and ~~hydrogen to a customer at its distribution center~~concluded that these prices are reasonable and ~~with a finance obligation~~has not adjusted any prices received from the ~~sale/leaseback~~independent provider. Securities reported at fair value utilizing Level 1 inputs represent assets whose fair value is determined based upon observable unadjusted quoted market prices for identical assets in active markets. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1, Level 2, or Level 3 during the nine months ended September 30, 2021.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


		As of September 30, 2021
		Carrying		Fair		Fair Value Measurements
		Amount		Value		Level 1		Level 2		Level 3
Assets
Cash equivalents (1)	$	610,651	$	610,651	$	140,574	$	470,077	$	—
Corporate bonds		530,089		530,089		—		530,089		—
Commercial paper		35,795		35,795		—		35,795		—
U.S. Treasuries		169,878		169,878		169,878		—		—
Certificates of deposit		17,004		17,004		—		17,004		—
Equity securities		147,649		147,649		147,649		—		—

Liabilities
Contingent consideration		18,520		18,520		—		—		18,520
Convertible senior notes		192,320		1,006,639		—		1,006,639		—
Long-term debt		147,255		147,255		—		—		147,255
Finance obligations		207,837		207,837		—		—		207,837


		As of December 31, 2020
		Carrying		Fair		Fair Value Measurements
		Amount		Value		Level 1		Level 2		Level 3
Liabilities
Contingent consideration		9,760		9,760		—		—		9,760
Convertible senior notes		85,640		1,272,766		—		1,272,766		—
Long-term debt		175,402		175,402		—		—		175,402
Finance obligations		181,553		181,553		—		—		181,553

(1)

Included in “Cash and cash equivalents” in our consolidated balance sheets as of September 30, 2021.

The fair values for available-for-sale and equity securities are based on prices obtained from independent pricing services. Available-for-sale securities are characterized as Level 2 assets, as their fair values are determined using observable market inputs. Equity securities are characterized as Level 1 assets, as their fair values are determined using active markets for identical assets.

Available-for-sale securities

The amortized cost, gross unrealized gains and losses, fair value of those investments classified as available-for-sale securities, and allowance for credit losses at September 30, 2021 are summarized as follows (in thousands):


	Amortized		Gross		Gross		Fair		Allowance for
	Cost		Unrealized Gains		Unrealized Losses		Value		Credit Losses
Corporate bonds	$	533,691	$	93	$	(3,695)	$	530,089		—
Commercial paper		35,719		76		—		35,795		—
Certificates of deposit		17,017		—		(13)		17,004		—
U.S. Treasuries		170,414		1		(537)		169,878		—
Total	$	756,841	$	170	$	(4,245)	$	752,766	$	—

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A summary of the amortized cost and fair value of investments classified as available-for-sale, by contractual maturity, at September 30, 2021 is as follows (in thousands):


	September 30, 2021
		Amortized	Fair
Maturity:		Cost	Value
Within one year	$	447,479	$	446,011
After one through five years		309,362		306,755
Total	$	756,841	$	752,766

The cost, gross unrealized gains, gross unrealized losses, and fair value of those investments classified as equity securities at September 30, 2021 are summarized as follows (in thousands):


	September 30, 2021
			Gross		Gross		Fair
		Cost	Unrealized Gains		Unrealized Losses		Value
Fixed income mutual funds	$	77,766	$	—	$	(132)	$	77,634
Exchange traded mutual funds		70,167		—		(152)		70,015
Total	$	147,933	$	—	$	(284)	$	147,649

Extended Maintenance Contracts

On a quarterly basis, we evaluate any potential losses related to our extended maintenance contracts for fuel cell systems and related infrastructure that has been sold. We measure loss accruals at the customer contract level. The expected revenues and expenses for these contracts include all applicable expected costs of providing services over the remaining term of the contracts and the related unearned net revenue. A loss is recognized if the sum of expected costs of providing services under the remaining term of the contract exceeds related unearned net revenue and is recorded as a provision for loss contracts related to service in the consolidated statements of operations. A key component of these estimates is the expected future service costs. In estimating the expected future costs, the Company considers its current service cost level and applies significant judgment related to expected cost saving initiatives. The expected future cost savings will be primarily dependent upon the success of the Company’s initiatives related to increasing stack life, achieving better economies of scale for service labor, and improvements in design and operations of infrastructure. If the expected cost saving initiatives are not realized, this will increase the estimated costs of providing services and will adversely affect our estimated contract loss accrual. Further, we continue to work to improve quality and reliability; however, unanticipated additional quality issues or warranty claims may arise and additional material charges may be incurred in the future. These quality issues could also adversely affect our contract loss accrual. Service costs during 2021 have been higher than previously estimated. The Company has undertaken or will soon undertake several initiatives to extend the life and improve the reliability of its ~~building. Cash collateralizing~~equipment. As a result of these ~~letters~~initiatives and our additional expectation that the increase in certain costs attributable to the global pandemic will abate, the Company believes that its contract loss accrual is sufficient. However, if elevated service costs persist, the Company will adjust its estimated future service costs and increase its contract loss accrual estimate.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet arrangements that are likely to have a current or future significant effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of ~~credit~~operations, liquidity, capital expenditures or capital resources that is ~~also considered restricted cash.~~material to investors.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon our ~~unaudited interim~~ consolidated financial statements, which have been prepared in accordance with ~~U.S. generally accepted accounting principles.~~GAAP. The preparation of these ~~unaudited interim~~ consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets,

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liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of and during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to revenue recognition, ~~for multiple element arrangements,~~ bad debts, inventories, intangible assets, ~~valuation~~impairment of long-lived assets and PPA executory contract consideration, accrual for loss on extended maintenance contracts, ~~on service,~~operating and finance leases, product warranty ~~reserves,~~accruals, unbilled revenue, common stock warrants, income taxes, stock-based compensation, ~~contingencies,~~ and ~~purchase accounting.~~contingencies. We base our estimates and judgments on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about

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(1) the carrying values of assets and liabilities and (2) the amount of revenue and expenses realized that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

~~We refer~~There have been no changes in our critical accounting estimates from those reported in our 2020 10-K, other than the addition of stock-based compensation.

Stock-based compensation

Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. In September 2021, the ~~policies~~Company issued performance stock option awards that include a market condition for certain executives. The Company uses the Monte Carlo simulation model to determine the fair value of performance stock option awards that include a market condition. In estimating fair value, management is required to make certain assumptions and estimates ~~set forth~~such as the expected term, volatility of the Company’s future share price, risk-free rate, and future dividend yield. Changes in assumptions used to estimate fair value could result in materially different results.

Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

Other than the ~~section “Management’s Discussion~~adoption of the accounting guidance mentioned in our 2020 10-K and ~~Analysis~~ASU 2020-06, there have been no other significant changes in our reported financial position or results of ~~Financial Condition~~operations and ~~Results~~cash flows resulting from the adoption of ~~Operations—Critical Accounting Estimates”, as well~~new accounting pronouncements.

On January 1, 2021, we early adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) using the modified retrospective approach. Consequently, the Company’s 3.75% Convertible Senior Notes is now accounted for as a ~~discussion~~single liability measured at its amortized cost. This accounting change removed the impact of ~~significant accounting policies included in Note 2, Summary of Significant Accounting Policies,~~recognizing the equity component of the ~~consolidated financial statements, both~~Company’s convertible notes at issuance and the subsequent accounting impact of ~~which are included in our Annual Report on Form 10-K for~~additional interest expense from debt discount amortization. Future interest expense of the ~~fiscal year ended December 31, 2016.~~

~~Recent Accounting Pronouncements~~

~~In July 2017, an accounting update was issued to address narrow issues identified~~convertible notes will be lower as a result of the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. This update addresses the complexity of accounting for certain financial

instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. The Company early adopted this accounting update during the three months ended June 30, 2017. The adoption of this guidance and net loss per share will be computed using the if-converted method for convertible instruments. The cumulative effect of the accounting ~~update was considered in determining that warrants issued during the second quarter of 2017 (see note 4) were equity classified.~~

In May 2017, an accounting update was issued to provide clarity and reduce both diversity in the practice and cost and complexity when applying the guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, ~~Compensation-Stock Compensation, to a~~ change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This accounting update is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. Earlyupon adoption ~~is permitted, including adoption in any interim period. The amendments in this update should be applied prospectively to an award modified~~ on ~~or after the adoption date.~~

In January 2017, an accounting update was issued to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with1, 2021 increased the carrying amount of ~~that goodwill. This~~the 3.75% Convertible Senior Notes by $120.6 million, reduced accumulated deficit by $9.6 million and reduced additional paid-in capital by $130.2 million as of September 30, 2021.

Recent Accounting Guidance Not Yet Effective

All issued but not yet effective accounting ~~update is effective for years beginning after December 15, 2019. Early adoption is permitted for interim~~and reporting standards as of September 30, 2021 are either not applicable to the Company or ~~annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is evaluating the impact this update will have on the consolidated financial statements.~~

In November 2016, an accounting update was issued to reduce the existing diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. This accounting update is effective for years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the impact this update will have on the consolidated financial statements.

In October 2016, an accounting update was issued to simplify how an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of this update are intellectual property and property, plant, and equipment. This accounting update is effective for the annual periods beginning after December 15, 2017 and interim periods within those years. The Company does not ~~expect the adoption of this update~~expected to have a ~~significant effect on the consolidated financial statements.~~

In August 2016, an accounting update was issued to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This accounting update is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the impact this update will have on the consolidated financial statements.

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In February 2016, an accounting update was issued which requires balance sheet recognition for operating leases, among other changes to previous lease guidance. This accounting update is effective for fiscal years beginning after December 15, 2018. The Company is evaluating the impact this update will have on the consolidated financial statements.

In June 2014, an accounting update was issued that replaces the existing revenue recognition framework regarding contracts with customers. In July 2015, the FASB announced a one year delay in the required adoption date from January 1, 2017 to January 1, 2018. The Company has established an internal implementation team to oversee the adoption of the new standard. To date the Company has identified relevant arrangements and performance obligations and does not believe adoption of the standard will have a significantmaterial impact on the timing and amount of revenue recognized, as well as the amount of revenue allocated to the identified performance obligations. The Company anticipates providing further information about the impacts of adoption at year end. The Company is planning on accounting for the transition using the modified retrospective basis method.Company.

Item 3 — Quantitative and Qualitative Disclosures about Market Risk

There has been no material change from the information provided in the 2020 10-K “Item 7A: Quantitative and Qualitative Disclosures About Market Risk,” other than those described below.

~~From time to time, we may invest our cash~~During the first nine months of 2021, the Company purchased U.S. Treasury securities, corporate bonds, commercial paper, certificates of deposit and money market funds, in ~~government, government backed and interest-bearing investment-grade securities that we generally hold for~~which the ~~duration~~major components of ~~the term of the respective instrument. We do not utilize derivative financial instruments, derivative commodity instruments or other~~ market risk ~~sensitive instruments, positions or transactions~~affecting us are credit risk and interest rate risk. We also purchased equity securities, in any material fashion. We are not subject to any material risks arising from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices or other market changes that affectwhich the major component of market risk ~~sensitive instruments.~~affecting us is equity risk.

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Our exposure to changes in foreign currency rates is primarily related to sourcing inventory from foreign locations and operations of ~~HyPulsion. This practice~~HyPulsion, S.A.S., our French subsidiary that develops and sells hydrogen fuel cell systems for the European material handling market. In addition, we also have an investment in HyVia, a joint venture with Renault that plans to manufacture and sell FCE-LCVs and to supply hydrogen fuel and fueling stations to support the FCE-LCV market primarily in Europe. Our exposure to foreign currency can give rise to foreign exchange risk resulting from ~~the varying cost of inventory to the receiving location.~~our equity method investment with HyVia, which operates in Europe. The Company reviews the level of foreign content as part of its ongoing evaluation of overall sourcing strategies and considers the exposure to be not significant. Our HyPulsion exposure presently is mitigated by low levels of operations and its sourcing is primarily intercompany in nature and denominated in U.S. ~~dollar.~~dollars. Our HyVia exposure presently is immaterial as we have not yet commenced commercial activities.

Item 4 — Controls and Procedures

(a) Disclosure controls and procedures.

~~The chief executive officer and chief financial officer, based on their evaluation of~~We maintain disclosure controls and procedures ~~(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded~~ that ~~the Company’s disclosure controls and procedures~~ are ~~effective for ensuring~~designed to ensure that information required to be disclosed in ~~the~~our reports that ~~it files~~we file or ~~submits~~submit under the ~~Securities~~ Exchange Act, ~~of 1934~~ is recorded, processed, summarized and reported within the time periods specified in ~~the Commission’s~~SEC rules and ~~forms. Disclosure controls~~forms, and ~~procedures include, without limitation, controls and procedures designed to ensure~~ that such information ~~required to be disclosed in filed or submitted reports~~ is accumulated and communicated to ~~the Company’s~~our management, including ~~its~~our Chief Executive Officer (our principal executive ~~officer~~officer) and Chief Financial Officer (our principal financial ~~officer~~officer) as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective in 2018, 2019 and 2020 because of the material weakness in internal control over financial reporting described in Part II, Item 9A “Controls and Procedures” of our 2020 10-K. The material weakness has not been remediated as of September 30, 2021.

Material Weakness

Management identified that the following deficiency existed in internal control over financial reporting in 2018, 2019 and 2020: the Company did not maintain a sufficient complement of trained, knowledgeable resources to execute its responsibilities with respect to internal control over financial reporting for certain financial statement accounts and disclosures. As a consequence, the Company did not conduct an effective risk assessment process that was responsive to changes in the Company's operating environment and did not design and implement effective process-level controls activities in the following areas:

(a)

Presentation of operating expenses;

(b)

Accounting for lease-related transactions;

(c)

Identification and evaluation of impairment, accrual for loss contracts, certain expense accruals, and deemed dividends; and

(d)

Timely identification of adjustments to physical inventory in interim periods.

As reported on our 2020 10-K, we continue to take steps to remediate this material weakness and will continue to take further steps until such remediation is complete. These steps include the following:

Hiring additional resources, including third-party resources, with the appropriate technical accounting expertise, and strengthening internal training, to assist us in identifying and addressing any complex technical accounting issues that affect our consolidated financial statements.

We will design and implement a comprehensive and continuous risk assessment process to identify and assess risks of material misstatements and ensure that the impacted financial reporting processes and related internal controls are properly designed, maintained, and documented to respond to those risks in our financial reporting.

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We will implement more structured analysis and review procedures and documentation for the application of GAAP, complex accounting matters, and key accounting policies.

We will augment our current estimation policies and procedures to be more robust and in-line with overall market dynamics including an evaluation of our operating environment in order to ensure operating effectiveness of certain process-level control activities.

We also intend to deploy new tools and tracking mechanisms to help enhance and maintain the appropriate documentation surrounding our classification of operating expenses.

We will report regularly to the Company’s Audit Committee on the progress and results of the remediation plan, including the identification, status, and resolution of internal control deficiencies.

As we work to improve our internal control over financial reporting, we may modify our remediation plan and may implement additional measures as we continue to review, optimize and enhance our financial reporting controls and procedures in the ordinary course. The material weakness will not be considered remediated until the remediated controls have been operating for a sufficient period of time and can be evidenced through testing that they are operating effectively.

(b) Changes in internal control over financial reporting.

~~There~~Exclusive of the steps taken in remediation activities, there were no changes in the Company’s internal control over financial reporting ~~that~~(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the ~~last fiscal~~ quarter ended September 30, 2021 that ~~have~~has materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1 — Legal Proceedings

~~An action has been brought in New York State Supreme Court by General Electric Co. (GE) and an affiliate~~On August 28, 2018, a lawsuit was filed on behalf of multiple individuals against the Company ~~seeking $1 million~~and five corporate co-defendants in the 9th Judicial District Court, Rapides Parish, Louisiana. The lawsuit relates to the previously disclosed May 2018 accident involving a forklift powered by the Company’s fuel cell at a Procter & Gamble facility in Louisiana. The lawsuit alleges claims against the Company and co-defendants, including Structural Composites Industries, Deep South Equipment Co., Air Products and Chemicals, Inc., and Hyster-Yale Group, Inc. for claims under the Louisiana Product Liability Act (“LPLA”) including defect in construction and/or composition, design defect, inadequate warning, breach of express warranty and negligence for wrongful death and personal injuries, among other damages. Procter & Gamble has intervened in that GEsuit to recover worker’s compensation benefits paid to or for the employees/dependents. Procter & Gamble has also filed suit for property damage, business interruption, loss of revenue, expenses, and other damages. Procter & Gamble alleges theories under the LPLA, breach of warranty and quasi-contractual claims isunder Louisiana law. Defendants include the Company and several of the same co-defendants from the August 2018 lawsuit, including Structural Composites Industries, Deep South Equipment Co., and Hyster-Yale Group, Inc.

In March and May 2021, Company stockholders, individually and on behalf of all persons who purchased or otherwise acquired Plug securities between November 9, 2020 and March 16, 2021 (the “Class”), filed complaints in the U.S. District Court for the Southern District of New York and U.S. District Court for the Central District of California against the Company, Plug Chief Executive Officer Andrew Marsh, and Plug Chief Financial Officer Paul Middleton (together, the “Defendants”), captioned Dawn Beverly et al. v. Plug Power Inc. et al., Case No. 1:21-cv-02004 (S.D.N.Y.), Smolíčekv. Plug Power Inc. et al., Case No. 2:21-cv-02402 (C.D. Cal.) and Tank v. Plug Power Inc. et al., Case No. 1:21-cv-03985 (S.D.N.Y.). The complaints include two claims, for (1) violation of Section 10(b) of the Exchange Act and Rule 10b5 promulgated thereunder (against all Defendants); and (2) violation of Section 20(a) of the Exchange Act (against Mr. Marsh and Mr. Middleton). The complaints allege that Defendants failed to disclose that the Company (i) “would be unable to timely file its 2020 annual report due ~~under an indemnification agreement between GE~~to delays related to the review of classification of certain costs and the ~~Company. GE seeks indemnification for funds it paid to settle a claim with Soroof Trading Development Co., an entity that had paid funds to GE to become a distributor~~recoverability of the right to use assets with certain leases”; and (ii) “was reasonably likely to report material weaknesses

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in its internal control over financial reporting[.]” The complaints allege that, a result, “positive statements about the Company’s ~~products.~~business, operations, and prospects were materially misleading and/or lacked a reasonable basis,” causing Class members losses and damages. The complaints seek compensatory damages “in an amount to be proven at trial, including interest thereon”; “reasonable costs and expenses incurred in th[e] action”; and “[s]uch other and further relief as the [c]ourt may deem just and proper.” On July 22, 2021, the U.S. District Court for the Southern District of New York consolidated the three cases and appointed a lead plaintiff. On July 28, 2021, Tank v. Plug Power, et. al., was voluntarily dismissed. An amended complaint was filed in the consolidated action on October 6, 2021.

On March 31, 2021, Company stockholder Junwei Liu, derivatively and on behalf of nominal defendant Plug, filed a complaint in the U.S. District Court for the Southern District of New York against certain Company directors and officers (the “Derivative Defendants”), captioned Liu v. Marsh et al., Case No. 1:21-cv-02753 (S.D.N.Y.) (the “Liu Derivative Complaint”). The Liu Derivative Complaint alleges that, between November 9, 2020 and March 1, 2021, the Derivative Defendants “made, or caused the Company to make, materially false and misleading statements concerning Plug Power’s business, operations, and prospects” by “issu[ing] positive financial information and optimistic guidance, and made assurances that the Company’s internal controls were effective,” when, “[i]n reality, the Company’s internal controls suffered from material deficiencies that rendered them ineffective.” The Liu Derivative Complaint asserts claims for (1) breach of fiduciary duties, (2) unjust enrichment, (3) abuse of control, (4) gross mismanagement, (5) waste of corporate assets, and (6) contribution under Sections 10(b) and 21D of the Exchange Act (as to the named officer defendants). The Liu Derivative Complaint seeks a judgment “[d]eclaring that Plaintiff may maintain this action on behalf of Plug”; “[d]eclaring that the [Derivative] Defendants have breached and/or aided and abetted the breach of their fiduciary duties”; “awarding to Plug Power the damages sustained by it as a result of the violations” set forth in the Liu Derivative Complaint, “together with pre-judgment and post-judgment interest thereon”; “[d]irecting Plug Power and the [Derivative] Defendants to take all necessary actions to reform and improve Plug Power’s corporate governance and internal procedures to comply with applicable laws”; and “[a]warding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees, costs, and expenses”; and “[s]uch other and further relief as the [c]ourt may deem just and proper.”

On April 5, 2021, Company stockholders Elias Levy and Camerohn X. Withers, derivatively and on behalf of nominal defendant Plug, filed a complaint in the U.S. District Court for the Southern District of New York against the Derivative Defendants named in the Liu Derivative Complaint, captioned Levy et al. v. McNamee et al., Case No. 1:21-cv-02891 (S.D.N.Y.) (the “Levy Derivative Complaint”). The Levy Derivative Complaint alleges that, from November 9, 2020 to April 5, 2021, the Derivative Defendants “breached their duties of loyalty and good faith” by failing to disclose “(1) that the Company would be unable to timely file its 2020 annual report due to delays related to the review of classification of certain costs and the recoverability of the right to use assets with certain leases; (2) that the Company was reasonably likely to report material weaknesses in its internal control over financial reporting; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.” The Levy Derivative Complaint asserts claims for (1) breach of fiduciary duty (as to the named director defendants), (2) unjust enrichment (as to certain named director defendants), (3) waste of corporate assets (as to the named director defendants), and (4) violations of Sections 10(b) and 21D of the Exchange Act (as to the named officer defendants). The Levy Derivative Complaint seeks a judgment “declaring that Plaintiffs may maintain this action on behalf of the Company”; finding the Derivative Defendants “liable for breaching their fiduciary duties owed to the Company”; directing the Derivative Defendants “to take all necessary actions to reform and improve the Company’s corporate governance, risk management, and internal operating procedures to comply with applicable laws”; “awarding damages to the Company for the harm the Company suffered as a result of Defendants’ wrongful conduct”; “awarding damages to the Company for [the named officer Derivative Defendants’] violations of Sections 10(b) and 21D of the Exchange Act”; “awarding Plaintiffs the costs and disbursements of this action, including attorneys’, accountants’, and experts’ fees”; and “awarding such other and further relief as is ~~vigorously defending~~just and equitable.” On April 27, 2021, the ~~action.~~U.S. District Court for the Southern District of New York consolidated the Liu Derivative Complaint and the Levy Derivative Complaint under Case No. 1:21-cv-02753-ER (the “Consolidated Action”).

On May 13, 2021, Company stockholder Romario St. Clair, derivatively and on behalf of nominal defendant Plug, filed a complaint in the Supreme Court of the State of New York, County of New York against the Derivative Defendants named in the Liu Derivative Complaint, captioned St. Clair v. Plug Power Inc. et al., Index No. 653167/2021 (N.Y. Sup. Ct., N.Y. Cty.) (the “St. Clair Derivative Complaint”). The St. Clair Derivative Complaint alleges that, for

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approximately two years beginning on March 13, 2019, the Company “failed to disclose and misrepresented the following material, adverse facts, which the [Derivative] Defendants knew, consciously disregarded, or were reckless in not knowing,” including: “(a) that the Company was experiencing known but undisclosed material weaknesses in its internal controls over financial reporting; (b) the Company was overstating the carrying amount of certain right of use assets and finance obligations associated with leases; (c) the Company was understating its loss accrual on certain service contracts; (d) the Company would need to take impairment charges relating to certain long-lived assets; (e) the Company was improperly classifying research [and] development costs versus costs of goods sold; and (f) the Company would be unable to file its Annual Report for the 2020 fiscal year due to these errors.” The St. Clair Derivative Complaint asserts claims for (1) breach of fiduciary and (2) unjust enrichment. The St. Clair Derivative Complaint seeks a judgment “for the amount of damages sustained by the Company” as a result of the Derivative Defendants’ breaches of fiduciary duties and unjust enrichment; “[d]irecting Plug Power to take all necessary actions to reform and improve its corporate governance and internal procedures to comply with applicable laws”; for “equitable and/or injunctive relief as permitted by law, equity, and state statutory provisions”; “awarding to Plug Power restitution” and “ordering disgorgement of all profits, benefits, and other compensation obtained” by the Derivative Defendants; “awarding to plaintiff the costs and disbursements of the action, including reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses”; and “granting such other and further relief as the [c]ourt deems just and proper.”

Item 1A -– Risk Factors

~~Part I, Item 1A,~~The risk factors discussed under the heading “Risk Factors” ~~of our most recently filed~~and elsewhere in the Company’s Annual Report on Form 10-K ~~filed with the Securities and Exchange Commission~~ for the ~~fiscal~~ year ended December 31, ~~2016, sets forth information relating~~2020 continue to important risks and uncertainties that could materially adversely affect our business, financial condition and operating results. Except to the extent that information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters described in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changesapply to our risk factors disclosed in our most recently filed Annual Report on Form 10-K. However, those risk factors continue to be relevant to an understanding of our business, financial condition and operating results and, accordingly, you should review and consider such risk factors in making any investment decision with respect to our securities.business.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

(a) ~~None.~~Not applicable.

(b) Not applicable.

Item 3 — Defaults Upon Senior Securities

None.

Item 4 — Mine Safety Disclosures

None.

Item 5 — Other Information

~~(a)~~ None.

~~(b) None.~~

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Item 6 — Exhibits


3.1	Amended and Restated Certificate of Incorporation of Plug ~~Power. (1)~~Power Inc. (filed as Exhibit 3.1 to Plug Power Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated by reference herein).

3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation of Plug Power Inc. ~~(1)~~(filed as Exhibit 3.3 to Plug Power Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated by reference herein)
	.
3.3	Second Certificate of Amendment of Amended and Restated Certificate of Incorporation of Plug Power Inc. ~~(2)~~(filed as Exhibit 3.1 to Plug Power Inc.’s Current Report on Form 8-K filed on May 19, 2011 and incorporated by reference herein)
	.
3.4	Third Certificate of Amendment ~~to Amended and Restated Certificate~~ of ~~Incorporation of Plug Power. (3)~~

~~3.5~~	~~Fourth Certificate of Amendment of the~~ Amended and Restated Certificate of Incorporation of Plug Power Inc. ~~(4)~~(filed as Exhibit 3.1 to Plug Power Inc.’s Current Report on Form 8-K filed on July 25, 2014 and incorporated by reference herein).
3.5	Certificate of Correction to Third Certificate of Amendment of Amended and Restated Certificate of Incorporation of Plug Power Inc. (filed as Exhibit 3.9 to Plug Power Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated by reference herein).
3.6	~~Third~~Fourth Certificate of Amendment of Amended and Restated ~~By-laws~~Certificate of Incorporation of Plug Power Inc. ~~(5)~~(filed as Exhibit 3.1 to Plug Power Inc.’s Current Report on Form 8-K filed on June 30, 2017 and incorporated by reference herein)
	.
3.7	Fifth Certificate of Amendment of Amended and Restated Certificate of Incorporation of Plug Power Inc. (filed as Exhibit 3.7 to Plug Power Inc.’s Quarterly Report on Form 10-Q filed on August 5, 2021 and incorporated by reference herein).
3.8	Certificate of Designations, Preferences and Rights of a Series of Preferred Stock of Plug Power Inc. classifying and designating the Series A Junior Participating Cumulative Preferred Stock. ~~(6).~~

~~3.8~~	~~Certificate of Designations, Preferences and Rights of a Series of Preferred Stock of~~(filed as Exhibit 3.1 to Plug Power Inc. ~~classifying~~’s Registration Statement on Form 8-A filed on June 24, 2009 and ~~designating the Series C Redeemable Convertible Preferred Stock (7)~~incorporated by reference herein)
	.
3.9	~~Certificate of Designations, Preferences~~Fourth Amended and ~~Rights of a Series of Preferred Stock~~Restated By-laws of Plug Power Inc. ~~classifying~~(filed as Exhibit 3.9 to Plug Power Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 and ~~designating the Series D Redeemable Convertible Preferred Stock (8)~~incorporated by reference herein).

~~3.10~~10.1 (1)	~~Certificate of Correction~~Eleventh Amendment and Waiver to ~~Third Certificate of Amendment of Amended and Restated Certificate of Incorporation of Plug Power Inc. dated as of December 21, 2016 (9)~~

~~3.11~~	~~At Market Issuance Sales Agreement, dated April 3, 2017, by and between Plug Power Inc. and FBR Capital Markets & Co. (10)~~

~~3.12~~	~~Warrant to Purchase Common Stock, issued April 4, 2017, by and between Plug Power Inc. and Amazon.com NV Investment Holdings LLC (11)~~

~~3.13~~	~~Transaction Agreement, dated as of April 4, 2017, by between Plug Power Inc. and Amazon.com, Inc. (11)~~

~~3.14~~	~~Warrant to Purchase Common Stock, issued April 12, 2017, by and between Plug Power Inc. and Tech Opportunities LLC (12)~~

~~3.15~~	~~Warrant Exercise Agreement, dated as of April 12, 2017, by and between Plug Power Inc. and Tech Opportunities LLC (12)~~

~~3.16~~	~~Second Amended and Restated 2011 Stock Option and Incentive Plan. (4)~~

~~3.17~~	~~Warrant to Purchase Common Stock, issued July 20, 2017, by and between Plug Power Inc. and Wal-Mart Stores, Inc. (13)~~

~~3.18~~	~~Amendment No. 8, effective as of July 20, 2017, to Shareholder Rights Agreement by and between Plug Power Inc. and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent. (13)~~

~~3.19~~	~~Transaction Agreement, dated as of July 20, 2017, by and between Plug Power Inc. and Wal-Mart Stores, Inc. (13)~~

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~~3.20~~	~~Amendment No. 8 to~~the Loan and Security Agreement, dated ~~as of June~~September 30, ~~2017,~~2021, by and among Plug Power Inc., Emerging Power Inc., Emergent Power Inc., the other borrowers from time to time party thereto, and ~~NY Green Bank. (14)~~Generate PPL SPV I, LLC, as assignee of Generate Lending, LLC.

~~3.21~~31.1 (1)	~~Master Lease Agreement, dated as of June 30, 2017, by and between Plug Power Inc. and Wells Fargo Equipment Finance, Inc. (14)~~

~~3.22~~	~~Amended and Restated Master Lease Agreement, dated as of June 30, 2017, by and between Proton GCI SPV I LLC and Generate Plug Power SLB 1, LLC. (14)~~

~~3.23~~	~~Amended and Restated Loan and Security Agreement, dated as of July 21, 2017, by and between Plug Power Inc. and NY Green Bank. (15)~~

~~31.1~~	Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ~~(16)~~

31.2 (1)	Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ~~(16)~~

32.1 (1)	Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ~~(16)~~

32.2 (1)	Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ~~(16)~~

101.INS*	Inline XBRL Instance Document ~~(16)~~(1)
101.SCH*	XBRL Taxonomy Extension Schema Document ~~(16)~~(1)
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document ~~(16)~~(1)
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document ~~(16)~~(1)
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document ~~(16)~~(1)
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document ~~(16)~~(1)
104	Cover Page Interactive Data File (embedded within the Inline XBRL document) (1)

(1)	Filed herewith.

*	Submitted electronically herewith.

~~(1)~~

~~Incorporated by reference to the Company’s Form 10-K for the period ended December 31, 2008.~~

~~(2)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated May 19, 2011.~~

~~(3)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated July 25, 2014.~~

~~(4)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated April 12, 2017.~~

~~(5)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated November 2, 2009.~~

~~(6)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated June 24, 2009.~~

~~(7)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated May 20, 2013.~~

~~(8)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated December 21, 2016.~~

~~(9)~~

~~Incorporated by reference to the Company’s Form 10-K for the period ended December 31, 2016.~~

~~(10)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated April 3, 2017.~~

~~(11)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated April 5, 2017.~~

~~(12)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated June 30, 2017.~~

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~~(13)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated July 21, 2017.~~

~~(14)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated July 21, 2017.~~

~~(15)~~

~~Incorporated by reference to the Company’s current Report on Form 8-K dated July 27, 2017.~~

~~(16)~~

~~Filed herewith.~~

Signatures

*Submitted electronically herewith. Attached as Exhibit 101 are the following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in eXtensible Business Reporting Language (XBRL) and tagged as blocks of text: (i) Interim Consolidated Balance Sheets at September 30, 2017 and December 31, 2016; (ii) Interim Consolidated Statements of Operations for the Nine Months Ended September 30, 2017 and 2016; (iii) Interim Consolidated Statements of Comprehensive Loss for the Nine Months Ended September 30, 2017 and 2016; (iv) Interim Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2017; (v) Interim Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016; and (vi) related notes, tagged as blocks of text.

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~~Signatures~~

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.
	~~PLUG POWER INC.~~

Date: November ~~8, 2017~~9, 2021	By:	/s/ Andrew Marsh
		Andrew Marsh
		President, Chief Executive Officer and Director (Principal Executive Officer)

Date: November ~~8, 2017~~9, 2021	By:	/s/ Paul B. Middleton
		Paul B. Middleton
		Chief Financial Officer (Principal Financial Officer)

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Delaware		22-3672377
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification Number)




Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	PLUG	The NASDAQ Capital Market

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PART I. FINANCIAL INFORMATION

Item 1 – Interim Condensed Consolidated Financial Statements (Unaudited)	3

Condensed Consolidated Balance Sheets	3

Condensed Consolidated Statements of Operations	4

Condensed Consolidated Statements of Comprehensive Loss	5

Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity	6

Condensed Consolidated Statements of Cash Flows	7

Notes to Interim Condensed Consolidated Financial Statements	8

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	25 33

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	40 59

Item 4 – Controls and Procedures	40 60

PART II. OTHER INFORMATION

Item 1 – Legal Proceedings	41 61

Item 1A – Risk Factors	41 63

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	41 63

Item 3 – Defaults Upon Senior Securities	41 63

Item 4 – Mine Safety Disclosures	41 63

Item 5 – Other Information	41 63

Item 6 – Exhibits	42 64

Signatures	45 65


	September 30,		December 31,
	2017		2016
Assets
Current assets:
Cash and cash equivalents	$	7,957	$	46,014
Restricted cash		14,902		11,219
Accounts receivable		52,869		11,923
Inventory		44,687		29,940
Prepaid expenses and other current assets		12,758		11,837
Total current assets		133,173		110,933

Restricted cash		33,668		43,403
Property, plant, and equipment, net of accumulated depreciation of $31,075 and $29,666, respectively		8,657		8,246
Leased property, net of accumulated depreciation of $9,731 and $4,544, respectively		75,344		54,060
Goodwill		9,314		8,291
Intangible assets, net of accumulated amortization of $1,565 and $1,032, respectively		3,892		3,933
Other assets		11,635		11,966
Total assets	$	275,683	$	240,832

Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	38,650	$	32,112
Accrued expenses		8,912		8,519
Accrual for loss contracts related to service		—		752
Deferred revenue		8,262		5,736
Finance obligations		23,913		14,787
Current portion of long-term debt		22,081		2,964
Other current liabilities		1,330		1,615
Total current liabilities		103,148		66,485
Deferred revenue		25,898		17,413
Common stock warrant liability		5,657		11,387
Finance obligations		35,466		29,767
Long-term debt		17,933		20,829
Other liabilities		119		241
Total liabilities		188,221		146,122

Redeemable preferred stock
Series C redeemable convertible preferred stock, $0.01 par value per share (aggregate involuntary liquidation preference $16,664); 10,431 shares authorized; Issued and outstanding: 2,620 at September 30, 2017 and 5,231 at December 31, 2016		709		1,153
Series D redeemable convertible preferred stock, $0.01 par value per share (aggregate involuntary liquidation preference $0 at September 30, 2017 and $18,500 at December 31, 2016); 5,000,000 shares authorized; Issued and outstanding: none at September 30, 2017 and 18,500 at December 31, 2016		—		8,469
Stockholders’ equity:
Common stock, $0.01 par value per share; 750,000,000 shares authorized; Issued (including shares in treasury): 228,120,565 at September 30, 2017 and 191,723,974 at December 31, 2016		2,282		1,917
Additional paid-in capital		1,244,789		1,137,482
Accumulated other comprehensive income		1,958		247
Accumulated deficit		(1,159,185)		(1,051,467)
Less common stock in treasury: 582,328 at September 30, 2017 and December 31, 2016		(3,091)		(3,091)
Total stockholders’ equity		86,753		85,088
Total liabilities, redeemable preferred stock, and stockholders’ equity	$	275,683	$	240,832


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	3,371,962	$	1,312,404
Restricted cash		90,688		64,041
Available-for-sale securities, at fair value (amortized cost $756,841 and allowance for credit losses of $0 at September 30, 2021)		752,766		—
Equity securities		147,649		—
Accounts receivable		132,370		43,041
Inventory		229,814		139,386
Prepaid expenses and other current assets		62,746		44,324
Total current assets		4,787,995		1,603,196

Restricted cash		390,542		257,839
Property, plant, and equipment, net		169,586		74,549
Right of use assets related to finance leases, net		22,039		5,724
Right of use assets related to operating leases, net		167,907		117,016
Equipment related to power purchase agreements and fuel delivered to customers, net		78,711		75,807
Goodwill		71,856		72,387
Intangible assets, net		37,644		39,251
Other assets		13,820		5,513
Total assets	$	5,740,100	$	2,251,282

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	68,378	$	50,198
Accrued expenses		52,645		46,083
Deferred revenue		35,463		23,275
Operating lease liabilities		23,284		14,314
Finance lease liabilities		2,758		903
Finance obligations		35,595		32,717
Current portion of long-term debt		23,491		25,389
Other current liabilities		28,329		29,487
Total current liabilities		269,943		222,366

Deferred revenue		63,402		32,944
Operating lease liabilities		139,400		99,624
Finance lease liabilities		17,027		4,493
Finance obligations		172,242		148,836
Convertible senior notes, net		192,320		85,640
Long-term debt		123,764		150,013
Other liabilities		55,113		40,447
Total liabilities		1,033,211		784,363

Stockholders’ equity:
Common stock, $0.01 par value per share; 1,500,000,000 shares authorized; Issued (including shares in treasury): 593,077,995 at September 30, 2021 and 473,977,469 at December 31, 2020		5,930		4,740
Additional paid-in capital		6,978,454		3,446,650
Accumulated other comprehensive (loss) gain		(2,338)		2,451
Accumulated deficit		(2,203,989)		(1,946,488)
Less common stock in treasury: 17,032,648 at September 30, 2021 and 15,926,068 at December 31, 2020		(71,168)		(40,434)
Total stockholders’ equity		4,706,889		1,466,919
Total liabilities and stockholders’ equity	$	5,740,100	$	2,251,282


	Three Months Ended				Nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenue:
Sales of fuel cell systems and related infrastructure	$	45,179	$	5,653	$	55,936	$	19,992
Services performed on fuel cell systems and related infrastructure		5,842		4,763		16,040		15,396
Power Purchase Agreements		5,428		3,858		14,684		9,626
Fuel delivered to customers		4,850		2,909		12,327		7,557
Other		128		376		279		779
Gross revenue		61,427		17,559		99,266		53,350
Provision for common stock warrants		(26,057)		—		(27,877)		—
Net revenue		35,370		17,559		71,389		53,350
Cost of revenue:
Sales of fuel cell systems and related infrastructure		35,671		4,241		44,398		16,182
Services performed on fuel cell systems and related infrastructure		5,766		4,481		17,400		16,190
Provision for loss contracts related to service		—		—		—		(1,071)
Power Purchase Agreements		7,395		4,464		21,460		10,961
Fuel delivered to customers		5,810		3,679		15,262		9,298
Other		138		313		301		855
Total cost of revenue		54,780		17,178		98,821		52,415

Gross (loss) profit		(19,410)		381		(27,432)		935

Operating expenses:
Research and development		7,436		5,001		20,059		15,032
Selling, general and administrative		9,535		8,636		36,584		25,485
Total operating expenses		16,971		13,637		56,643		40,517

Operating loss		(36,381)		(13,256)		(84,075)		(39,582)

Interest and other expense, net		(2,724)		(2,113)		(7,112)		(3,795)
Change in fair value of common stock warrant liability		(1,878)		1,975		(16,454)		4,709

Loss before income taxes	$	(40,983)	$	(13,394)	$	(107,641)	$	(38,668)

Income tax benefit		—		—		—		392

Net loss attributable to the Company	$	(40,983)	$	(13,394)	$	(107,641)	$	(38,276)

Preferred stock dividends declared and accretion of discount		(25)		(26)		(3,086)		(78)
Net loss attributable to common shareholders	$	(41,008)	$	(13,420)	$	(110,727)	$	(38,354)
Net loss per share:
Basic and diluted	$	(0.18)	$	(0.07)	$	(0.52)	$	(0.21)
Weighted average number of common shares outstanding		225,762,535		180,375,680		212,419,634		180,261,449


						Accumulated
				Additional		Other								Total
	Common Stock			Paid-in		Comprehensive		Treasury Stock				Accumulated		Stockholders’
	Shares	Amount		Capital		Income		Shares		Amount		Deficit		Equity
December 31, 2016	191,723,974	$	1,917	$	1,137,482	$	247		582,328	$	(3,091)	$	(1,051,467)	$	85,088
Net loss attributable to the Company	—		—		—		—		—		—		(107,641)		(107,641)
Other comprehensive income	—		—		—		1,711		—		—		—		1,711
Stock-based compensation	101,004		1		7,287		—		—		—		—		7,288
Stock dividend	48,510		1		76		—		—		—		(77)		—
Public offerings, common stock, net	9,314,666		93		20,571		—		—		—		—		20,664
Conversion of preferred stock, Series D	9,548,393		96		7,682		—		—		—		—		7,778
Conversion of preferred stock, Series C	2,772,518		28		416		—		—		—		—		444
Stock option exercises	110,000		1		39		—		—		—		—		40
Exercise of warrants, net of warrants issued	14,501,500		145		39,713		—		—		—		—		39,858
Provision for common stock warrants	—		—		34,532		—		—		—		—		34,532
Accretion of discount	—		—		(3,009)		—		—		—		—		(3,009)
September 30, 2017	228,120,565	$	2,282	$	1,244,789	$	1,958		582,328	$	(3,091)	$	(1,159,185)	$	86,753


	Nine months ended		Year ended
	September 30, 2021		December 31, 2020
Beginning Balance	$	24,013	$	3,702
Provision for Loss Accrual		15,641		35,473
Released to Service Cost of Sales		(6,055)		(2,348)
Released to Provision for Warrants		—		(12,814)
Ending Balance	$	33,599	$	24,013


	At September 30,
	2017	2016
Stock options outstanding (1)	19,965,599	14,982,570
Restricted stock outstanding	248,077	26,667
Common stock warrants (2)	115,824,242	4,000,100
Preferred stock (3)	2,782,075	5,554,594
Number of dilutive potential common shares	138,819,993	24,563,931


	At September 30,
	2021	2020
Stock options outstanding (1)	24,784,288	14,434,983
Restricted stock outstanding (2)	4,960,376	5,992,974
Common stock warrants (3)	80,017,181	110,573,392
Convertible Senior Notes (4)	39,170,766	56,872,730
Number of dilutive potential shares of common stock	148,932,611	187,874,079


	September 30, 2021		December 31, 2020
Land		1,165		1,165
Leasehold improvements	$	1,440	$	1,121
Construction in progress		100,136		15,590
Software, machinery, and equipment		94,200		78,859
Property, plant, and equipment		196,941		96,735
Less: accumulated depreciation		(27,355)		(22,186)
Property, plant, and equipment, net	$	169,586	$	74,549


	Weighted Average	Gross Carrying		Accumulated
	Amortization Period	Amount		Amortization		Total
Acquired technology	10 years	$	13,040	$	(4,888)	$	8,152
Customer relationships, Non-compete agreements, Backlog & Trademark	6 years		890		(398)		492
In process research and development	Indefinite		29,000		—		29,000
		$	42,930	$	(5,286)	$	37,644


Remainder of 2021	$	363
2022		1,453
2023		1,453
2024		1,431
2025 and thereafter		3,944
Total	$	8,644


Major products/services lines
	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Sales of fuel cell systems	$	67,032	$	51,998	$	152,620	$	107,515
Sale of hydrogen installations and other infrastructure		48,967		31,664		109,429		44,361
Services performed on fuel cell systems and related infrastructure		6,677		6,829		18,397		19,586
Power Purchase Agreements		9,321		6,629		25,508		19,629
Fuel delivered to customers		11,556		9,831		33,804		24,536
Other		369		97		679		235
Net revenue	$	143,922	$	107,048	$	340,437	$	215,862



Contract assets	Nine months ended
	September 30, 2021
Transferred to receivables from contract assets recognized at the beginning of the period	$	(13,344)
Revenue recognized and not billed as of the end of the period		4,439
Net change in contract assets		(8,905)


Contract liabilities	Nine months ended
	September 30, 2021
Increases due to cash received, net of amounts recognized as revenue during the period	$	91,985
Revenue recognized that was included in the contract liability balance as of the beginning of the period		(52,675)
Net change in contract liabilities	$	39,310


	September 30, 2017		December 31, 2016
Raw materials and supplies	$	37,282	$	26,298
Work-in-process		4,082		1,865
Finished goods		3,323		1,777
	$	44,687	$	29,940


	Nine months ended
	September 30, 2017		September 30, 2016
Beginning balance	$	752	$	10,050
Change in estimate		—		(1,071)
Reductions for losses realized		(752)		(5,745)
Ending balance	$	—	$	3,234